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Advisor

Dollar bulls fading

Technical feature on the website today (click here) points out that the March U.S. dollar index futures dropped to a fresh two-month low of 78.75 on Tuesday.  ("The dollar index is a basket of six major world currencies traded against the greenback and rolled into one composite index price.")

 

 "Near-term technical damage has been inflicted on the March U.S. dollar index futures.... and more price pressure this week would produce a technically bearish downside "breakout" from a choppy, sideways trading range that has been in place since early December," according to the Dow Jones story.

 

Kind of an interesting bit of analysis, if you pay attention to this sort of thing. Does anyone?

 

John

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3 Replies
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Veteran Advisor

Re: Dollar bulls fading

Still regard it as C wave in a running flat correction of a bull market.

 

It is all closely intertwined with everything else in the All One Market so you are correct- it is an important key to watch.

 

Still feel like the liquidity driven AOM is running out of gas but it is day to day until it does.

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Veteran Advisor

Re: Dollar bulls fading

Despite overrunning ideal support by a few pips, dollar low looks to have held and the euro short squeezers appear to be on the run for the moment.

 

Every once in a while a guy hits on one even if he's just blowing.

 

A look at the intraday action gives a hint that at least a few folks are using the dollar weakness to try to leg their way out of the long everyhting/short dollar trade- which I'd highly recommend for anyone who's been on it- or any variation thereof- and has good profits.

 

Can't say it will happen but with the whole world on some variation of that trade the profits could all go poof in an hour or two.

 

fwiw, h

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Senior Contributor

Re: Dollar bulls fading

A Brazilian observes, "the fallout from a currency war could actually be quite severe - and global in reach. The games that governments are currently playing in currency markets could cause countries to set up trade barriers against imports. And that could bring about the end of the truly global economy - a "de-globalization" that would steal our current standard of living and thwart a return to prosperity."

 

"In short, pretty much every major economy is trying to weaken its currency against its competitors - albeit by a variety of methods. Some are holding interest rates artificially low. Others - as Brazil and China are increasingly attempting to do - are trying to drive down their currencies by putting direct blocks in the way of currency appreciation.

Let's be clear: Each protectionist "currency war" move blocks the free flow of finance around the world, and raises the temptation on competitors to raise barriers of its own.
"

 

Looks a bit scary, if true.

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