I see a lot of talk about the “rally” in the US Dollar (USD) so I decided to check it out. The USD has been moving down since 2001 with lower highs and lower lows. Price had a nice rally from March 2008 to March 2009 but has been dropping since that time. Price remains several points above the 2008 low but the March 2009 high did not make it back to the previous high from November 2005.
The weekly swing chart has retraced about 75% of the range of the year long move that ended in March. Price continues to make lower lows and appears set to test the March levels.
The daily chart also shows continued swings lower. The recent “rally” has moved price up a buck and a half in seven days. Wake me when price nears the August high.
The long term Gann fan shows price recently tested the 1×1 descending angle of the 1992-2001 bull market range. Price remained above the 1×1 for a few weeks but then dropped below and shows no real strength.
I’ve got the same read on the chart as you, but this kind of thing is somewhat of a contrary indicator from a sentiment perspective
Check out this story:
http://online.barrons.com/article/SB125423654414149515.html
“Venezuela thus joins the parade of foreign borrowers issuing bonds denominated in dollars. That means they’re expecting to pay back those debts in devalued dollars.
“That to me is a sign the short-U.S. dollar trade is ripe for a reversal, when basically the biggest idiot in the house is short,” writes Nic Lenoir of ICAP, the major money broker, on ZeroHedge.com.”
IMO, hard not to see Chavez as the epitome of dumb money
Mike – There definitely is a lot of money short the USD. Of course, every dollar we have in our collective wallet or bank accounts is long the USD. So I am not sure how “short” the world is on a “float” scale. And sometimes the masses are right. The charts point down and I will change my mind when the charts change.