Long-Term Trend In U.S. Dollar Higher
For all the talk of impending dollar weakness, the charts tell me different. The long-term trend on the Daily U.S. Dollar chart is clearly higher as is the intermediate-term trend on the Weekly — see 1st chart — as arguably is the intermediate-term trend on the Monthly – certainly the short-term trend on the Monthly is higher.
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This is the picture today. And I understand that going forward things can change. I also understand that not too many professional traders will go bucking the established trends on the longer-term charts, at least not for more than a few hours at a time.
One thing I am fairly certain of, based on my approach to analyzing markets, is that on the day we do see a trend shift the other way, I’ll be there to identify it.
What reinforces the bull trend in the U.S. currency currently is the recent weakness in the Japanese Yen. The short-term trend for USDJPY had been sideways until yesterday when it shifted back higher, in favor of the buy signal given on 1/28/09 — see 2nd chart below. The short-term on the Weekly USDJPY chart is also quietly shifting higher today, just in time for weeks end.
I think, and this is just one man’s opinion, that the market is telling us that the Greenback is still the “flight to quality” currency by default. And while I don’t know where we are going, do you really think it’s likely that we could get to the point where in order to buy a new car, we’d have to go to our stash and pull out a 70 lb slab of silver – approximately 1000 ounces – and drag that down to the car dealer in exchange for a Chevy sedan?
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