US Dollar Index Technical Analysis

[kalo]

Knowing more about the currency trading game is easier when you know the theories and the technicalities that surround it. What you need is to invest time and effort in studying these theories and technicalities.

[fxtrends]

In a year that will end dramatically different than it began, the US Dollar emerged as a focal point amongst global investors. In the final days of 2009 there is a renewed sense of optimism and hope for continued economic recovery, a far cry from investor's nervousness and skepticism that characterized the beginning of the year. The US Dollar, which had received a safe haven bid during the financial crisis, had now become the funding currency for a new carry trade. The so called risk trade of 2009 or Dollar carry trade featured stronger equity and commodity prices at the expense of the Greenback.


While most of 2008 was marred by risk aversion and volatility, investor's appetite for risk-taking had been restored by early spring 2009. A series of measures by the Obama administration and the Federal Reserve reinstilled confidence into the financial institutions and more importantly the market. Solid first quarter results and guidance by the same financial institutions set the table for the risk trade of 2009 to flourish.


The Fed's outward promise to keep rates low for an extended period of time punished the Greenback, allowing commodities to reflate and equity markets to surge to extraordinary yearly gains. Gold prices lept to fresh record highs by summer's end as the risk trade continued to gain momentum. The Dollar carry eventually climaxed at the end of November with the Japanese Yen reaching a fresh 14-year high against the Greenback.


Risk aversion that stemmed from Dubai World's debt postponement created a massive flight-to-safety into bonds. The sudden drop and subsequent recovery in yields highlighted the end of a shrinking yield differential between the US and Japan. The surge in the Yen was a wake-up call for the BOJ, which consequently expressed concerns of deflation due to currency appreciation. While equity markets have remained robust, the Dollar carry has begun to unravel as yields and yield differentials have continued to improve. Expectations of rate hikes by the Fed, along with weakness in the Europe have helped the Greenback to rebound and Gold to plummet heading into 2010.


10 KEY TECHNICAL EVENTS OF 2009 (in chronological order)


1. The USD/JPY fails at 87.05 on January 20th, marking a 4-week double bottom formation. Daily bullish diverging studies help buoy a recovery that last 10 weeks.

2. At 67% below it's 200-day MA, bullish diverging daily studies buoy the Dow Jones Industrial Average out of a short-term falling wedge on March 9th. The unprecedented recovery from the March lows has lasted nearly 9 months and continues to mark fresh year-to-date highs.


3. The EUR/USD convingly clears the 20-day MA on March 11th for the first time in 2009. The Dollar Index (DXY) closes below the 20-day MA to highlight a false-break pattern of the November 2008 high.


4. The USD/JPY clears the 200-day MA only days before, but on April 6th ends a 10-week recovery by rejecting near 101.60, a former key pivot support level. This would mark the USD/JPY's 2009 high.


5. On June 16th the EUR/USD rebounds off a key Fibonacci retracement at 1.3748 (38.2% of the entire range from the 2008 high to 2009 low) after same pivot formerly served as resistance. The EUR/USD respected the 50% and 61.8% retracement pivots in the ensuing months.


6. Gold breaks above a 4-week trendline on September 2nd, then breaches a 3-month trendline a few hours later. The following day, Gold breaks-out of a 16-month triangle pattern, ending months of consolidation. A month later Gold reaches a new all-time high.


7. The USD/JPY briefly probes below 85.00 before recovering on November 27th. The capitulation-type low marks a wide ranging white spinning top formation. The USD/JPY rallies off the 14-year low, recovering 8 Yen in the last 4 weeks.


8. The 2-year Treasury yield recovers from a steep decline, nearly reaching .60% on November 30th. The subsequent recovery highlights a possible a 11-month double bottom. Yields across the curve have enjoyed a spectacular run to end the year.


9. Gold hits another fresh record high above 1225 on December 3rd ahead of a bearish close. A daily spinning top formation at extraordinarily overbought levels on weekly and daily studies confirm Gold's blow-off top formation.


10. The EUR/USD breaks down out of a large 9-month rising wedge and a smaller 4-week rising wedge on December 4th to highlight a 10-day double top formation. A daily RSI triangle breakout and subsequent loss of 50-day MA support highlight a change in trend that has benefitted the DXY the last few weeks of the year.

(FXTRENDS 2010 for the 2010 FX Preview & new posts)

[HGNR]

Is there any prediction again about USD in 2010?...

Thanks

[fxtrends]

Is there any prediction again about USD in 2010?...

Thanks

check out my blog periodically for my latest FX predictions.....

FXTRENDS 2010

[HGNR]

check out my blog periodically for my latest FX predictions.....

FXTRENDS 2010

Ok...thanks...

[fxtrends]

The DXY's (US Dollar Index) 50-day MA has broken above it's 200-day MA to signal further strength in the medium-term. This is the first golden cross since the third quarter of 2008 and only the third since the bear market began in 2002. More importantly, the Greenback has experienced this bullish crossover in the early stages of both major corrective recoveries in 2005 & 2008. An oversold hourly dip near the 20-day MA would be an actractive (long) entry point.

021710.bmp (image)

FXTRENDS 2010
Peter Ruud (fxtrends) on Twitter

[fxtrends]

The EUR/USD appears to be completing a fifth wave within a larger third wave move that originates from the November 26th/December 3rd 2009 double top. The formation of a 3-week falling wedge or ending diagonal, which often appears in the fifth wave position, further supports the beginning of a larger fourth wave correction. While speculators continue to add to an already record net short position against the euro (according to the latest CFTC IMM data), the formation of a daily RSI base (14-period) and bullish MACD divergence hint of an overdue recovery. Clearing falling wedge resistance (now at 1.3650) and a RSI bear trendline confirms the breakout and will first target 1.3739, where a confluence of Gann and Fibonacci retracements are clustered. The pattern's breakout target projects a move towards 1.4000, the vicinity of the previous fourth wave (a common Elliot wave target). If, however, the EUR/USD manages to close below 1.3486 (a key Fibonacci retracement of the March/December 2009 rebound), then 1.3444 (Friday's low) is likely to be retested. A weak test or a marginal breach of the newly formed 2010 low would offer another compelling (long) entry point.
FXTRENDS 2010

[fxtrends]

The Australian Dollar is trading within a wedge formation vs the US Dollar, British Pound, Japanese Yen and the euro. Price-action is also diverging against 4-hourly MACD, which hints of a possible reversal. Below .9140 (AUD/USD) will confirm that a larger correction is in store. Meanwhile, a daily close above .9170 (AUD/USD) suggests further strength and could trigger a possible retest of .9334 (January highs).

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[Somya Gabriel]

To end the week of March 8 to March 12, the US dollar weakened against many of the other major forex currencies. This is largely due to imports and jobless claims both decreasing. For the first time in five months, imports fell as demands cooled, while jobless claims also fell to 462,000 after a 6,000 decrease. The Dow Jones gained by 0.42% and the NASDAQ gained by 0.40%. Gold was able to gain slightly to close at $1,108.2 an ounce and crude oil barely moved to close at $82.11 per barrel.

[fxtrends]

The DXY (US Dollar Index), EUR/USD and USD/CHF have formed wedges within their respective daily RSI oscillators. The latest trend of dollar weakness should continue while these formations remain intact. A substantial move above the EUR/USD's 10-week MA at 1.3804 would shift the immediate focus to 1.3853-1.4025, an Elliot wave target region (also near the 38.2 & 50% retracement of the downleg from the Jan 13th high). Above 1.4211, however, negates the current wave count and would suggest a medium-term trend shift. Meanwhile, while 4-hour bearish MACD divergence has triggered a correction off today's high, a substantial loss of 20-day MA support at 1.3652 (along with a breakdown of the aforementioned RSI wedge formations) is required to reignite dollar bulls.

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