USD 02 (Oct 09 - Sep 10)

[winston]

Weekly Review

Dollar. There has been the selloff, a hold at support a very logical level for it to hold and an oversold bounce. There has been a pullback this week to test that bounce. It held the near term support at the 10 day EMA and 18 day EMA, showing doji on both Wednesday and Thursday.

Friday there was sharp break to the upside, and the dollar traded below 1.27 Euro at one point. It was down to 1.269 (and less) on the session. By the close, it could not hold off all of the gain (1.2711 Euro versus 1.2819 Thursday). Off its peak, but it closed above the 50 day EMA.

It had a very solid bounce after this short flag pattern that consolidated the initial break off the February and March support level and it came back to test that.

Dollars are acting as a safe haven again. We last saw that in April and May when Europe was falling off the table. The dollar then sold June to mid August when it was decided that the European woes were overblown. Indeed, Germany is showing good GDP growth. You would think those fear were overblown and the dollar was artificially inflated by those fears.

Now the dollar is moving back up. Could it be on some the weaker US data? It could, but why would people buy US dollars if they thought the problem was with the US economy? If the US economy goes downhill, the Fed will do everything it can to keep the money supply plentiful and growing and that works adversely to the value of the dollar.

The dollar should be going down if we are worried about the US economy, but it is going back up. Indeed, it started to break higher out of its own inverted head and shoulders pattern after the selloff.

How many times have we seen this pattern in plays in this market? We have many plays on the report with this pattern, and now the dollar is showing it. AMZN formed an inverted head and shoulders and broke higher. Now it is testing and ready to move again.

BEN had a selloff, an inverted head and shoulders, and now a break to the upside. GMCR is not as clear, but you can see the selloff, the formation of the head and shoulders, and the break higher. JOYG: Shoulder, head, shoulders, and the break higher. NTGR shows a very clear inverted head and shoulders, a breakout, and now it is testing.

SCHN has the inverted head and shoulders, a break to the upside, and you could even say it is forming a new shoulder now. WEBMD: inverted head and shoulders, test, and then a break to the upside.

There are more than this, but I am just giving an idea what is out there. You cannot swing a dead cat without hitting a stock that is in either an inverted head and shoulders pattern or, more recently, forming ABCD consolidations.

There are also flag consolidations, double bottoms, double bottoms with handles, cup with handles, and there have been trading ranges. These are not selloff patterns; they are accumulation patterns. They are not topping patterns. There are buyers slowly working into stocks, and they are working into them when there is a lot of gloom in the market.


Source: MarketFN.com

[winston]

Weekly Review

Dollar. The upside move and the ability to hold support over the past several sessions had stymied the moves we had seen in the fear sectors. The DXY0 was struggling on Thursday, and it struggled a bit more on Friday. There was no selloff (1.2734 Euro versus 1.2720 Thursday). It was peeling back to test.

It is not the trouble, but it just made a good reversal from its downtrend. It tested that reversal, rallied again, and now it is putting in another flag pattern at the 50 day EMA. There is still plenty of room for it to run up to the key resistance level just below 85 on the DXY0.

It has not changed anything; there was just no need to rush into the dollar on Thursday and Friday. That was particularly true on Friday because stocks were performing better and the fear level died down as the session went on.

Perhaps investors thought helicopter Ben would not do anything to stop the Fed stimulus. He stands ready to do something no one knows exactly what in the event things worsen in the US economy.

Source: MarketFN.com

[winston]

Weekly Review

Dollar. Other markets continued the inverse relationship to the stock market, particular the US dollar. You would think if the economy was recovering that the dollar would strengthen, but that is not the case (1.2894 Euro versus 1.827).

It is in a rollover, and I noted that last week with that big move lower on Wednesday. It is much lower than earlier in the week. The dollar looks like it will roll over and come back toward the 200 day EMA and this consolidation range from March and April.


Source: MarketFN.com

[kennynah]

230pm 6/9 (what a date )

Watch out, as Europe comes online... Major USD pairs are priming for some volatility as seen in last 1/2 hour

[kennynah]

/DX @ 83.30 seems like a good sell to me....

you think?

[winston]

/DX @ 83.30 seems like a good sell to me....

you think?

You may want to read Dr. Doom, Nourel Roubini's latest comments, in his thread in the "Market Guru" section of the forum

[kennynah]

thanks...but i prefer to hear from my next door old auntie who walks by aided by her tri-legged cane or just about anyone in this forum....

[kennynah]

/DX technical reading - 12/9/2010

upper resistance of 83.70

this fails and drops...2 months later.... 78 region...

any thoughts?

[winston]

Weekly Review

Dollar. The dollar once again did a big nothing on the day, stalling out once more at the 50 day EMA. It has been moving laterally since coming off of the last test. That is not necessarily bad action. It is trying to set up for a second break to the upside.

Its second attempt never got underway before the three-week, lateral-to-slightly-lower move. We will see if the dollar can make this break and continue higher. The dollar has been something of a fear trade as worries about Europe and the US hit a crescendo.

It seems strange that the dollar would get investors when the US economy was in question, but that goes to show you how concerned investors around the world are about the world economic recovery.

The dollar closed slightly weaker (1.2712 Euro versus 1.2701 Thursday). Intraday it was stronger, trading down to 1.26 range, but as the day went on it lost ground. A little bit of concern crept in and stocks were able to hold their gain, making the dollar less a repository of extra funds on the day. No big change in the chart at all.


Source: MarketFN.com

[kennynah]

technically, i have /DX support-turned-resistance at 82.03 region?

do you have a similar read??

thens