U.S. Dollar Index: Technical Analysis
July 17th, 2008WARNING: This is not a recommendation to buy, sell or hold any financial instrument.
Human Readable Summary: I’m still bearish on the dollar.
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Ok, let’s try to eat soup with a knife.
U.S. Dollar Index, Weekly Interval
The U.S. Dollar is entering a make or break phase. The weekly Bollinger bands are compressing, which means that we should see a strong move soon—any day to two weeks.
Dollar bears (I’m one, in case you haven’t guessed) need to see 70.79 taken out on the U.S. Dollar Index.
It looks like there is a better than average chance that we will see that happen—within a couple of weeks. I like seeing candles under the 20EMA during BB compression on the weekly interval. I like that the triangle has broken to the downside. I like that the MACD slope is negative. I like that the stochastic isn’t extreme yet.
But…
With that strategic support at 70.79 ahead, and the stochastic getting into the lower bands… The dollar may need some more really bad news to get this done.
I’m looking at this, and extending it out a few weeks—without bad news—and what could we see?
USDX drifts down near that all time low with the stochastic in extreme oversold territory.
It hasn’t happened yet, but if you’re bearish, this is about the time when you might start experiencing pre-double bottom jitters.
Again, it hasn’t happened, but I don’t want to see a double bottom form on this, at an all time low, with the weekly stochastic in extreme oversold.
So, I remain bearish on the dollar, but we need to crack 70.79.
