Friday, May 28, 2010

Dollar Index double/triple top?

The Dollar index could be putting in a double or triple top (daily chart) and a break down below 85.17 would confirm it.
This breakdown could target a retest of the long term trendline shown in the second (weekly) chart.  The previous correction on the dollar index was very shallow and if this one is equally shallow then the support at 85.17 could hold and we could form a wedge or bull flag here.

The dollar Index had been moving up with the Indices this year unlike last year when it moved inversely. Today's move shows the old correlation is back where equities move up and the US dollar is moving down.
EURUSD is 50% of the dollar index and looks to have put in a double bottom but with stocks moving higher I think that the commodity currencies of AUD CAD and NZD are better longs vs the USD.


  1. thanks Nic, daily and 4 hrly well and truly bearish with the hourly failing to hold back above the 200 sma