Double Top in Greenback
From a technical stand-point we still have a double top in place on the daily U.S. Dollar Index chart. The futures contract also gave us a close below the 2-1/2 month up-trend line, and it also closed below last weeks low at 87.91.Jay Norris
The red volume cluster on the bottom of the chart — lower right side — is also bearish, though it’s hard to put much weight on this indicator given the contract is so thinly traded. The U.S. Dollar index is a leading indicator however and has a wide following amongst analysts.
Should the market reverse the course of the previous 2-1/2 month rally it may be signaling the market is starting to calm itself after the drama and acceptance of the seriousness of the global econoomic slowdown.
Recent strength in the carry pairs may also be pointing to a easing of fears as speculative money is working its way back into the higher yielding pairs and shorting the lower yielding currencies.
jnorris@brewerinvestmentgroup.com
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