Posts Tagged ‘U.S Dollar Index Futures’
The FOREX Dollar
The FOREX Dollar, or what is technically referred to as the US Dollar Index Futures, has been in some turmoil recently. On the one hand, it had gone down on rising Crude Oil prices. On the other, it then went up wildly on the Greek situation with the EuroDollar weakening. Technically, it is in a symmetrical triangle pattern, The pattern most recognized of all the patterns identified by technical analysts to date.
My educated guess, based on fundamental analysis and the wild US Government spending and a Democratic Administration, the Democrats being known for liberal spending, and the fact that all the world’s countries reserves of liquid US Dollars are burning a hole in the respective countries’ hands is that soon economically the Dollar has to start falling again. Technically it is now in the midst of a 50% fibonacci correction which is ending sooner than expected with the coming of the triangle.
The combination of these facts, both fundamental and technical, leads me to believe that soon there will be a major break (according to technical analysis) and it will be downwards (as indicated by fundamental analysis).
The break downwards in technical analysis would be at about 4%-5% of the point at which the pattern breaks (see my article on triangles in the All Tutorials Category). But I foresee a further downwards spiral into a bonafide downward trend that may spell a not-so-comfortable period for the world in general. Unless the world changes its’ currency of reference and then ONLY the US will suffer a lot. The other countries will be much less affected currency-wise.
But, chicken little may be wrong. Or, the fall may be much less brutal. I do not predict the future, I only bring forth what the chart (or the changing of the price value) shows me, and I do think there are bad times for the Dollar ahead sometime in the future.
This is the way the Chart looks:
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Futures signal the way for the U.S Markets
I know very well that the situation looks grim for the U.S. economy. The defaults on Mortgages are way up, an extremely high jobless rate that doesn’t seem to want to go down at all, the worries of financial experts that the health-care bill recently passed by Congress will WEIGH on the deficit instead of decreasing it, and a general feeling that we may be headed into a double-dip as far as the financial markets and the whole U.S. is concerned.
I think we are being presumptuous in saying that the economy is headed down again. I give as my proof, as usual the Technical Analysis that can be made on the market, and what we can derive as a conclusion from it.
Take the futures on the 3 indices of Wall Street. They show some weakness, especially the Dow futures which has broken the upcycle trend line. But the others though a little bit closer to the line are still on the way up, and the Dow itself is on a parallel to its trend routs upwards.
I think the situation is in control. From a technical point, the S & P 500 just did a beautiful-looking retest on the 1166 line and the futures as I write these lines give it a thumbs up. I think that the general and specific trend for America is upwards. Just check out the Futures Charts below:
This is the way the Chart of the Dow Jones Futures looks:
This is the way the NASDAQ 100 Futures Contracts index looks:
This is the way the S&P 500 Futures look:
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U.S. Dollar Update
So goes the mighty Dollar! No, I’m only joking. Seeing the Dollar’s situation lately and all the messy ink that’s being spilled over the incredible fall and the double dip this current post-depression phase is headed for; it makes a grown technician laugh till he has tears in his eyes. The MIGHTY Dollar is not going anywhere and will eventually get over his current temporary mental-illness. That is for the next year or so. After that time, and the Chinese with their trillions of Dollar Notes and Bills, will tell the tall tale.
Speaking for the long run, and in analysis of the markets we mean by that no longer than a year and a half or so, the dollar will come out of the dumpster surely and looking like nothing happened. But in the meanwhile, check the Chart below for assurance that a new, bonafide and classical sideways pattern has emerged. Though leaning slightly to the down side, it definately conforms with the rules for a sideways. It is not long before it will break and my fundamentally speaking guess is that it will break downwards..
Technically, we are speaking of the Dollar Index $DOL or DX in symbology. On the Chart provided, check the lines that border the pattern. The upper line is a very strong, historical support/resistance line. It can break less likely than the bottom line, which is the Fibonacci 38.2% correction line, here serving as a support. There is a chance that I am not right but, life’s a game they say.
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This is the way the Chart looks:
Check out the previous Dollar update in the Market Snapshots Catagory—-“The world dollar index”