Posts Tagged ‘dollar index’
US Dollar–Head And Shoulders Above the Crowd
The US Dollar Index Futures, a major tool used to estimate the US Dollar’s true worldwide value as it trades against the major currencies of the world, has been quietly making a technical pattern called a “head and shoulders” . If you look at it carefully you will see an image, more or less of a man’s head and shoulders, with the shoulders peaking slightly at their end. This is the classical look of the pattern. Once more, the Index has already broken out from the pattern, i.e. passed the neckline, and is on the way to fulfill its destiny and head to the target I listed on the Chart below, that is, 82.00 points.
Since this pattern is usually associated with major tops and we have no reason to believe that such is not the case here, I do believe we are at the start of a major downwards trend that could last a few months to a year and drag the Dollar down to places it has not seen in a long time. More than 10 years of US Government spending on wars and bailing out financial criminals have flooded the world with its own currency of reference. Now it is time for the Dollar to pay back for the devastation it has wreaked on many innocent people. It will be only a symbolic gesture, and we may well forget it this time next year. Because, you know, this is a world where lies thrive and the Mighty Dollar rules!
This is the way the Chart looks:
Share and Enjoy
European Stock and Currency Summary
The Federal Reserve Bank chairman Ted Bernanke commented Tuesday that the U.S. recovery will remain intact. This continues to lend a prop to risk appetite as did talk that Thursday’s China export data will show a 50% increase. European equity exchanges traded positive throughout the session.
The risk currencies advanced, CDS rates came down and peripheral Euro Dollar zone bond rates came down somewhat. EUR/USD nudged 1.20 from a 1.1924 low, GBP/USD recovered from its ratings-worry sell off Tuesday adding one cent to 1.4534, despite a surprise widening in the visible trade balance to GBP7.2B. USD/JPY pivoted around 91.50. The main European indices are up around 0.4%, gold is down $3 at 1234oz after printing a lifetime high Tuesday and oil is up $1 at $73bbl.
Where the turnarounds are happening are all around strong support/resistance lines all historic in importance. The Dollar Index Futures hit a major resistance line yesterday at an in day high above 89 points and retreated. This seems to be the end of the monthly upwards trend that started when prices broke the long-term symmetric triangle upwards as I pointed in my previous article. The Futures Index will not, it seems to me, make its intended goal of 92.3 points, but this is true for most pattern breaks. It is hard to say for now what will be with the US Dollar rates around the world, but the upswing seems to be ended when looking at Dollar/World Currency pairs as they end streaks and hit s/r lines in addition to seeing the Dollar Index Futures as is shown on the Chart Below.
This is the way the Chart looks:
Share and Enjoy
G-D Bless America
By this I mean, of course, none other than the US Dollar. Oh Mighty One!! Bestow your blessings on our fluctuating currency, for ’tis to be majestically and majically going up again against all fundamental odds. It’s been very hard to follow, much less to invest by. As these lines are written the US Dollar Index Futures have been going upwards nicely, breaking their previous daily downwards movement which could hardly be called a trend. The strong upward trend is confirmed today with the gap up that was caused by good world-wide news over the weekend. This trend is not expected to end soon. But, as I always have written when addressing the Dollar, any upwards trend is only a correction of the long-term downwards pattern that has plagues the Dollar since the start of this current Depression. Check out the chart to enlighten you to the short-term facts and the strong possibility that this short-term trend pattern will continue for some time to come.
This is the way the Chart looks:
Share and Enjoy
OOOooops!!
I was wrong. The rule “buy at breakout only” slipped right by me this time. No, Technical Analysis is not to blame for MY mistake, only yours truly. Fact is I WAS right about the Dow Fiasco and I did say the S&P 500 was due to make a correction, then recover. Nobody has a monopoly on accuracy and I take full charge for the words I wrote in this page not so long ago.
But, now that there is a breakout, I can say truly that according to Technical Analysis the truly Mighty US Dollar is headed in a new upwards trend that should take it up at least 10% in the next few months or so. Time is hard to judge with Technical Analysis and we only have the time-frame of the broken-out triangle shown below to help us. This is the large, long-termed Monthly time-frame and its symmetric triangle pattern HAS been broken upwards, so be patient in investing on the FOREX Dollar Futures, it’ll get there in time with a target of 92.3 points on the DX Futures. There is no SURE THING!! but here there is about a 70% chance that I am right which is better than the 50-50 of tossing a coin.
This is the way the Chart looks:
Share and Enjoy
Woe Is Me to the Mighty US Dollar!
Yes, I know I’ve said farewell to the Dollar’s Index Futures, the FOREX barometer for the world’s base currency of reference. But my fond farewells were based on the fundamental assumption that this was only a temporary correction until the start of the long term downtrend cycle that awaits it down the road. This is economically speaking, because the world-wide glut of US Dollar Bills that have flooded the entire world in the Bush Administration years; when there was a free for all printing of money to fund wars and bail out financial criminals so they can stay filthy rich and live on an island of their own in the South Pacific instead of doing time in Fort Worth. This has left the US Dollar, as it trades against the world’s currency basket, only a matter of time before all these recovery-hyped upwards trends run dry and the medium range downwards trend resumes. And such may be the case with the latest moves shown on the daily chart below.
The monthly chart, also shown below, shows our extra-long term downtrend as it ends up in a symmetric triangular pattern with a possible break upwards daily, but it looks to me to be only a false break and the montly triangle should continue on it path down soon to meet its upwards sloping lower angle, and then possibly break it.
Update: Please check out my continuation of this article, OOOooops!!, for an in depth look at the actual outcome of the forecasting made here.
This is the way the Monthly Chart looks with its triangular pattern:(may break downwards in the far future)
This is the way the Daily Chart looks showing the possible beginning of the end for the Dollar:
Share and Enjoy
Long term FOREX trading
In the long run, you are better off finding a FOREX composite, either Dollar or cross linked, and using the services of a FOREX brokerage after you have thoroughly evaluated as to spread rates, commission, leveraging and honesty-track record, than trading FOREX through the respective futures. However, I use the futures contracts Charts to help you get an idea of the way the market is headed, especially for the long term and particularly to see the trends that the Foreign Currency Exchange is taking as a whole over the long run. And, I feel it my duty to point out that trading with the FOREX brokerages itself is a dangerous and very tempting game. The futures contract do follow more completely the technical analysis lines and patterns than FOREX. Therefore, while I do not disqualify FOREX trading in itself; because the truly professional and stout hearted investors have a lot to gain from it, I do indeed myself prefer the futures contracts as a cheap and non-leveraged alternative to FOREX trading.
I have below, for example, shown the Euro Dollar and the British Pound Sterling as they also are making a long term monthly symmetric triangle. This is in addition to the same pattern observed by me on the previous article concerning the US Dollar Index. The period of time that these triangles are forming in is for about more than a year and a half. It does seem that the time is soon that we will see a break in one of these triangles, maybe next month or even after. As I wrote earlier, the break is a buy signal, but there is no guarantee that the resulting movement, whether it be upwards or down, will continue all the way to its’ intended technical destination. Nor is it guaranteed, though it is likely in more than 60% of the time, that the pattern will indeed conform to the technical specifications it has. But 60%-75% is better than fifty-fifty and surely better than the 20% that we see on the average trade in the equity or FOREX markets.
Anyway, this is the Chart, the intention is to share a possible chance that I see that maybe even this month a pattern will be broken. Even then, caution is advised and follow up of the monthly investment not only with the Monthly Charts, but also with the Weekly and Daily Charts as well.
This is the way the Monthly Euro Chart looks:
