There is really just one thing that means anything to the Dollar and that is the fact that the FED continues it's "measured" position on interest rates and traders take that as onward and upward for the Fed funds rate for the forseeable future. So, the Dollar continues to rally which eventually is going to cause problems for the economy. But who cares? Technically, the trend is UP for the Dollar and that's all that matters. With Dollar/Yen approaching 117.50 and the EURO breaking well below the 120.00 level today, there's no doubt about the technical condition of the Dollar. How high can the Dollar go? That's a good question. Suffice to say that, until the EURO can close back above 1.22oo, the path of least resistance is DOWN. The one caveat is the fact that, although the EURO is showing every sign of moving lower, it still has some work left before it makes a new yearly low below the 1.1870 mark. So, keep a close eye on the EURO's trading on the break below 1.1900. If the market begins to lose its conviction and begins to rally it may be a good place to BUY Euros using any close below 1.1870 as your STOP.
Dale F. Doelling
Chief Market Technician
Trends In Commodities
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