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.
There’s no substitute for a trading floor to get great ideas, so Jim Cramer created a better one at Real Money and blogs there exclusively. We then added legendary hedge fund manager, Doug Kass, with his exclusive Daily Diary and best investing ideas. Staffed with more than 4 dozen investing pros, money managers, journalists and analysts, Real Money Pro gives you a flood of opinions, analysis and actionable trading advice found nowhere else, and allows you to interact directly with each expert.
Already a Subscriber? Please login.
