Back in January I talked about how the US Dollar was on the verge of collapsingand recent developments are reinforcing my view. After breaking down from a major head and shoulder pattern in 08′, this currency had quite a violent throwback, causing many bears to reverse their position. Now that the chart has resumed the longer term trend, it appears to be in a very dangerous position. Should this pattern play out fully over the course of the next few years, it would ultimately have the dollar being in the 40’s.

Watch the ADX when it turns up and if the red -D1 is still on top, look out below. One other aspect to consider is the inter-market relationship between the dollar and the general markets. A falling dollar has been very bullish for the overall markets lately, but should the dollar find a bottom and rise from here (which is always a possibility), then the markets would be become weak.

USD

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4 Responses to “Dollar in Jeopardy”

  1. G Moore Says:

    Market is being run in the interest of Goldman, et al and butt covering Fed. They need a falling dollar and it shall be so.

  2. Lioncub Says:

    Here is my 1c, not sure if it makes sense. Fed cannot led the $ fall, right? Chinese are ready to propose a new world currency if $ loses its value to the said levels (they already proposed in the past). So, I think, the big players (who blew the bubble) are going to let the markets pop. We can confirm if the markets are going to fall 5 – 10% from today to wednesday with a mild recovery later on this week.

    I think oil (and mkt) can be shorted from 10:40am ish today. Mining, Auto, Telecom, Entertainment industry would be my fav shorts.

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