U.S. Dollar Index Analysis and Forecast
Currencies / US Dollar May 03, 2009 - 01:58 PMBy: David_Petch
The US Dollar Index has been experiencing weakness over the course of the past few days and is challenging present support levels, which if broken, could see a dip to 82-83. Analysis today will illustrate various trends in the USD and what to expect over the course of the next few weeks.
The daily chart of the US Dollar Index is shown below, with upper and lower 21 MA Bollinger bands in close proximity to each other, suggestive that a breakout from the present consolidation pattern is imminent. Full stochastics 1, 2 and 3 are shown below in order of descent, with the %K beneath the %D in stochastics 1 and 3. The short-term and longer-term stochastics are bearish, while mid-term stochastics are trending sideways. A breakout of the consolidation pattern is set to occur, but the daily chart suggests further sideways action until the breakout occurs. A break of the USD below 83.5, followed by 83 sets up the possibility for a decline to the 78-79 level.
Figure 1
The weekly chart of the USD index is shown below, with upper and lower 21 MA Bollinger bands within range of the index. Full stochastics 1, 2 and 3 are shown below in order of descent, with the %K beneath the %D in stochastics 1 and 2. At present, the weekly chart of the USD has a negative bias, with weakness expected to continue for another 1-2 weeks at a minimum.
Figure 2
The monthly chart of the US Dollar Index is shown below, with all three lower Bollinger bands between 68 and 70, indicating strong support in this region. Full stochastics 1, 2 and 3 are shown below in order of descent, with the %K above the %D in all three instances. Based upon the monthly chart, the USD is in a bullish uptrend, even though the daily and weekly charts exhibit weakness.
Figure 3
The short-term Elliott Wave of the USD index is shown below, with the thought pattern forming denoted in green and the alternate path denoted in grey. At present, The USD is in threat of breaking beneath a wedge structure that would have a measured move to the 78-80 area before basing. Carefully watch the 83.0 level as mentioned last week, because a close beneath this level would suggest a trip to 78-80 is in the cards.
Figure 4
The mid-term Elliott Wave count of the USD index is shown below, with the thought path forming denoted in green and the alternate path denoted in green. Anyone wishing to try and short the USD should wait for a decline below 83, because chances are that a 3-5 point decline would subsequently follow.
Figure 5
The daily chart of the Canadian dollar index is shown below, with the Canadian dollar rising above the index. Full stochastics 1, 2 and 3 are shown below in order of descent, with the %K above the %D in all three instances. Based upon positioning of the %K in stochastic 3, the Canadian dollar could continue to rally for another 2-4 weeks before a top is put in place.
Figure 6
The daily chart of the Australian dollar Index is shown below, with the index rising to the current level of the index. Full stochastics 1, 2 and 3 are shown below in order of descent, with the %K beneath the %D in stochastics 1 and 2. Given the %K is curling higher in stochastic 1, alongside positioning of the %K in stochastic 3, there is another 2-4 weeks remaining in potential upside to the currency from down under, as per the Canadian dollar, before a top is put in place.
Figure 7
The daily chart of the Euro index is shown below, with the index midway between the upper and lower 21 MA Bollinger bands. Full stochastics 1, 2 and 3 are shown below in order of descent, with the %K above the %D in stochastics 1 and 3. Positioning of the %K in stochastics 1 and 3 of the Euro is similar to that of the Aussie dollar, except they are starting at a lower level. Again, the Euro has the potential to run for 2-4 weeks before putting in a top.
Figure 8
That is all for today. I will update gold tomorrow AM. Have a great day.
By David Petch
http://www.treasurechests.info
I generally try to write at least one editorial per week, although typically not as long as this one. At www.treasurechests.info , once per week (with updates if required), I track the Amex Gold BUGS Index, AMEX Oil Index, US Dollar Index, 10 Year US Treasury Index and the S&P 500 Index using various forms of technical analysis, including Elliott Wave. Captain Hook the site proprietor writes 2-3 articles per week on the “big picture” by tying in recent market action with numerous index ratios, money supply, COT positions etc. We also cover some 60 plus stocks in the precious metals, energy and base metals categories (with a focus on stocks around our provinces).
With the above being just one example of how we go about identifying value for investors, if this is the kind of analysis you are looking for we invite you to visit our site and discover more about how our service can further aid in achieving your financial goals. In this regard, whether it's top down macro-analysis designed to assist in opinion shaping and investment policy, or analysis on specific opportunities in the precious metals and energy sectors believed to possess exceptional value, like mindedly at Treasure Chests we in turn strive to provide the best value possible. So again, pay us a visit and discover why a small investment on your part could pay you handsome rewards in the not too distant future.
And of course if you have any questions, comments, or criticisms regarding the above, please feel free to drop us a line . We very much enjoy hearing from you on these items.
Disclaimer: The above is a matter of opinion and is not intended as investment advice. Information and analysis above are derived from sources and utilizing methods believed reliable, but we cannot accept responsibility for any trading losses you may incur as a result of this analysis. Comments within the text should not be construed as specific recommendations to buy or sell securities. Individuals should consult with their broker and personal financial advisors before engaging in any trading activities as we are not registered brokers or advisors. Certain statements included herein may constitute "forward-looking statements" with the meaning of certain securities legislative measures. Such forward-looking statements involve known and unknown risks, uncertainties and other factors that may cause the actual results, performance or achievements of the above mentioned companies, and / or industry results, to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements. Do your own due diligence.
Copyright © 2009 treasurechests.info Inc. All rights reserved.
Unless otherwise indicated, all materials on these pages are copyrighted by treasurechests.info Inc. No part of these pages, either text or image may be used for any purpose other than personal use. Therefore, reproduction, modification, storage in a retrieval system or retransmission, in any form or by any means, electronic, mechanical or otherwise, for reasons other than personal use, is strictly prohibited without prior written permission.
David Petch Archive |
© 2005-2010 http://www.MarketOracle.co.uk - The Market Oracle is a FREE Daily Financial Markets Analysis & Forecasting online publication.
Comments
Post Comment (Moderated)