USD Index vs EUR/USD

a few thoughts on the USD index. According to wiki the current setup of the USD index looks as follows:
It is a weighted geometric mean of the dollar's value compared only with
- Euro (EUR), 57.6% weight
- Japanese yen (JPY) 13.6% weight
-  Pound sterling (GBP), 11.9% weight
-  Canadian dollar (CAD), 9.1% weight
-  Swedish krona (SEK), 4.2% weight and
-  Swiss franc (CHF) 3.6% weight


CHF is basically tied to the EUR and GBP is highly correlated to the EUR. That means that more than 70% of the index is driven by highly Euro crisis related currencies. That's why the index is an almost perfect mirror of the EUR/USD exchange rate. 

Right now it's kind of tough to predict any targets for the EUR/USD based on a technical setup. But for the USD index my next target is still around 87. That's a 5% increase. Assuming that this move is only triggered by the 70% Euro crisis related currencies this results in about a 7% decrease of these currencies compared to the USD. Based on a current 1.25 EUR/USD exchange rate this means the EUR/USD would soon trade at around 1.16.
That wouldn't be good for stock markets...however, in the long run good for Europe...