Dollar May See a Mild Bounce
The U.S. dollar has been trading sideways for the last six weeks, moving between $0.79 and $0.80. The fact that $0.79 has found support leads me to believe that we may see a slight appreciation moving forward. Please do not misinterpret me: I am not calling for a bull market in the dollar, but rather a mild bounce. When trading currencies, a key pivot point is the 20-day moving average (MA) (which the December futures are above – see the blue line on the chart below. Perhaps the bigger development is that prices are probing the 34-day exponential moving average (EMA), identified by the orange line. The 34-day EMA has served as resistance in the dollar since early August when prices were 4% above current prices and just off their 2012 highs.U.S. Dollar Index Source: QST View Chart » View in New Window »
Further appreciation would not only set up trades to take advantage of deprecation in other currencies but a number of commodities are also exhibiting an inverse relationship to the greenback. It would not surprise me to see further declines in grains, metals and energies -- and I would not be shocked if livestock also joins the party....69 more words left in this article. To read them, just click below and try Real Money FREE for 14 days.
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