Today the US Dollar Index (Ticker:Ticker::USDollar) rose nearly 40 points to break above the 10,090.00 resistance level that developed over the last three trading days. The break out in the safe haven currency occurred over a holiday when no important U.S. news was released. Previous to the break out the market was easing from the spike in volatility that occurred during the EU Summit. During the Summit the US Dollar Index dropped roughly 150 points after the European Council announced the € 120B growth pact. The measures announced at the EU Summit helped to restore a measure of confidence to the markets, leading to a risk on sentiment among traders, and leaving the US Dollar Index in a lull.
Global leader are uncertain how long the renewed confidence will last, and due to the holiday it is not possible to tell if today’s break out is an early sign that the EU Summit inspired confidence is begging to fade. The event risk scheduled to occur over the next 24 hours has the potential to strength or tear down the renewed investor confidence that the market has seen this week. Traders will be closely following Mario Draghi press conference looking for signs of stimulus from European Central Bank to confirm their optimusm that the EU is taking step towards a recovery.