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U.S. Dollar Bullish Outlook Throughout 2009

Currencies / US Dollar Feb 23, 2009 - 03:23 AM GMT

By: David_Petch

Currencies Best Financial Markets Analysis ArticleUS Dollar Index - The daily chart of the US Dollar Index is shown below, with the upper 21 and 34 MA Bollinger bands riding the index, suggestive that further upside should be expected. 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 %K curling back above the %D in #1, expect upside strength to continue into the foreseeable future.


Figure 3

The weekly chart of the US Dollar Index is shown below, with upper Bollinger bands above the index and lower BB's still rising, suggestive further upside should be expected. Full stochastics 1, 2 and 3 are shown below in order of descent, with the %K beneath the %D in stochastics #1 and #2, but above it in #3. The %K in #1 and #2 has curled up, suggestive that upside in the USD could extend for another 3-4 weeks.

Figure 4

The monthly chart of the US Dollar Index is shown below, with the index rising above the upper 21 month MA Bollinger band, while all three lower BB's are between 68.50 and 70.41. The 34 MA BB is above the 55 MA BB, suggestive that the mid-term trend is oversold, further confirming strength in the USD. 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 present positioning of the %K in stochastic #2, the USD could remain in an overall uptrend for most of 2009.

Figure 5

The mid-term Elliott Wave chart of the US Dollar Index is shown below, with the thought pattern of the USD shown in green (was originally added over one month ago). The USD has nearly mirrored the thought pattern to a tee and has nearly broken above the former high established back in late November 2008. Trends for the USD suggest further upside, which creates uncertainty with respect to whether or not the preferred or alternate count is in play. If the alternate count is in play, the USD index could rise to 95-100 over the course of the coming 6-8 weeks.

Figure 6

The long-term Elliott Wave count of the USD index is shown below, with the preferred count shown in colour and the alternate count shown in colour. I am going to modify the thought paths of market direction for both counts later on tonight, but I wanted to illustrate how well the preferred count has been tracking the “thought” market direction. Rather than a decline occurring as shown in this chart, expect further upside for 2-4 weeks at a minimum before any sort of significant change in trend occurs to the downside.

Figure 7

The Canadian dollar Index is shown below, with lower Bollinger bands all in close proximity, while upper BB's are starting to fan out, suggestive a breakout of the consolidation pattern is likely…to the downside. Full stochastics 1, 2 and 3 are shown below in order of descent, with the %K beneath the %D in stochastics 1 and 2, while above the %D in 3. Based upon the present trend, expect at least 2-4 weeks of further weakness in the Canadian dollar.

Figure 8

The Australian Dollar Index is shown below, with lower Bollinger bands in close proximity, while upper Bollinger bands are starting to fan out, suggestive a breakout of the recent consolidation pattern is likely…to the downside. Full stochastics 1, 2 and 3 are shown below, with the %K beneath the %D in #2 and #3, while above the %D in #1; however, the %K in stochastic 1 appears to be rolling over, suggestive that weakness in the currency from down under should persist for another 2-4 weeks at a minimum.

Figure 9

The Euro Index is shown below, with the index starting to ride the lower Bollinger bands, while the upper Bollinger bands are starting to fan out, suggestive further downside is imminent. Full stochastics 1, 2 and 3 are shown below in order of descent, with the %K beneath the %D in stochastics 2 and 3 , while marginally above the %D in 1; this suggests another 2-3 weeks of further downside/consolidation in the Euro Index before basing.

Figure 10

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.

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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.

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