The Dollar Index is making a stand but that is about the most constructive
I can get.
Figure1 is a weekly chart of the Dollar Index. The close over the positive
divergence bar (price bar inside yellow oval) has at least temporarily thwarted
the Dollar's down trend. The Dollar did reverse at resistance (key pivot level
76.28) and it is now sitting just above support at 73.61. A close below support
and the lows of the positive divergence bar would see the Dollar's down trend
resume. A close above 76.28 means a new uptrend.
Figure 1. Dollar Index/ weekly
The technical setup seems pretty straightforward. The bigger question is why
the Dollar is NOT acting as a safe haven during times of market duress. The
equity markets are clearly under stress and if recent patterns hold true, this
should be a positive for the Dollar. But it hasn't. We could surmise why this
is so, but I would venture to guess that investors are losing faith in the
good old US of A as our structural problems - economic and political - will
not be fixed without some sort of crisis occurring first. The policy of "kicking
the can down the road" remains the policy of choice in Washington.
In summary, the Dollar Index is hanging in there, but why it isn't doing better
is the bigger question.
Disclaimer: Guy M. Lerner is the editor and founder
of The Technical Take blog. His commentary on the financial markets
is based upon information thought to be reliable and is not meant as investment
advice. Under no circumstances does the information in his columns represent
a recommendation to buy or sell stocks. Lerner may on occasion hold positions
in the securities mentioned in his columns and on the Web site; in all instances,
all positions are fully disclosed at http://thetechnicaltakedotcom.blogspot.com/.
However, their positions may change at anytime. For more information on any
of the above, please review The Technical Take's full Terms of Use and Privacy
Policy (link below). While Lerner cannot provide investment advice or recommendations,
he invites you to send your comments to: guy@thetechnicaltake.com.
Copyright Notice: Except for making one printed
copy of this newsletter or any other materials, files or documents available
from, accessible through or published by TheTechnicalTake, LLC for your personal
use (or downloading for the same limited purpose), none of these said materials,
files and/or documents may be reproduced, republished, rebroadcast or otherwise
re-distributed without the prior expressed written permission of Guy M. Lerner.
Circle Us