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Dollar Index: Key Level Here And Now
From Nic Lenoir of ICAP
Just a brief intraday update on the USD. We have potential H&S formation in EURUSD, AUDUSD, and inverse H&S in DXY. Furthermore we are very close to the 61.8% retracement from the highs in AUDUSD at 99.26, and while in EURUSD the level is 1.4035, we have resistance around the highs of 10/0 and 10/10 between 1.4010 and 1.4031. Overall the USD if it must find support should ind it around here. AUDUSD chart shows massive saturation on the slow stochastic and the RSI is at levels where the market corrected both in May and October 2009.
If anyone wants to take a stab at buying the USD here is probably a good time to do it, and relatively tight stops can be used.
Good luck trading,
Nic
And here is a chart from CreditTrader showing that we may be ending the recent period of weakness based on technicals. Then again technicals do work best away from centrally planned markets.
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I've said it before, Nic - getting in front of the AUD/USD train has left many, many bodies in it's wake despite picture perfect setups. I think the only chart that still works with any TA whatsoever is the dollar index, since that market is now feeding the reaction of every single market out there.
Yes it's possibly going to be a bloodbath once the tide turns on the dollar shorts.
Possibly here and now with how oil has decoupled from the latest leg higher across the market board.
Oil has not decoupled from PMs, but I agree that this recent trend suggests that oil is breaking from FIAT (Silver/gold decoupled from FIAT in the spring of '09 when the equity markets tested the Fall '08 lows). A move to $100 or even $95 would assure it. This would either be a sign of a) an oil (production) shock or b) further loss of confidence in the dollar. If both of these were true it would be bye bye dollar over night. The oilgarchs have been waiting for that all along, and they have managed (by cutting the economy's throat in the Fall of '08) to bleed the system until now. I think that the dollar can only handle one more dead wreckening until it is done (foreclosuregate should do the trick), but when that oil spike comes! It is over.
+83.12
Oil HAS decoupled from broad markets, it failed to set new highs.
Oil has that variance from the PMs as someone has to actually use it in product form. Even as the dollar approaches toilet paper value, oil is not spiking for the simple fact there is too much oil sloshing in the world right now and consumers are too broke to buy significant amounts of it. Oil has to go one way in the short term, down.
Vampy, just curious. are you trading from home? I know you are an electrical engineer by education. without disclosing your identity, what is your level of marketplace interaction? again, i'm just curious. no need to answer, unless you would like.
Mandy look so fucking HOT today, I had to shut off my TV. Boner city.
Mmmmmmandy....
Everybody calling a top on this a top on that. But remember the technicals come from the fundamentals, and the dollar is over valued, period. Gold is undervalued, period. Sure we are at a turning point, as POMO is almost everyday yo, and Forclosurgate is going to be the end all of end all ("We can fix it" -JPM....JPM are a bunch of pranster, bankster gangsters). If there is a meltup in the dollar, what will cause it? Weakness in Australia? They may be on the brink of a housing collapse, one that would be triggered if the US real estate market vanished (which is what could very well happen pricewise), but there would be bad news for the doolar; the reserve note is backing all debts right now, even the Euro and Yen are backed with dollars. All falls down, and here it comes. A month from now at the most. And no, the dollar will not last the day, if even the night.
Really? The dollar is overvalued "period"? Against what? The Euro? The Aussie? The Swissie? Kindly tell me which metric you are using to say the dollar is overvalued, "period". I'm interested, genuinely.
First, the dollar backs all of those currencies, and yes, all of those currencies are over valued. But if you want to play games, ok, I'll play gams. Say hello to my 'lil frien'!
Ok, if you're saying they're overvalued to gold, then I'll go with that. I was referencing which FIAT that the dollar is overvalued against. Hence, my original AUD/USD comment - two fiats in comparison.
That's simply a frivolous argument to make. Arguing which fiat is worth what compared to another fiat? I guess it would matter in which minute you were speaking...
It kinda matters to those who trade forex.
I get what you are saying.. I think the USDX will disconnect. I don't think it has to be around 70 for all time highs in commodities. People seem to forget the index compares USD against other flawed currencies..
I think the index could be at 85 and we could still have all time highs in PM's and commodities..
Or, I could be wrong and the USD takes a big ole shit and hits 70 by the end of Nov and 50 by the coming June.
I am looking for a bounce before it breaks 75
The US Dollar Index includes the exchange rates of the following six currencies:
57.6% euro (EUR),
13.6% Japenese yen (JPY),
11.9% Pound sterling (GBP),
9.1% Canadian dollar (CAN),
4.2% Swedish krona (SEK), and
3.6% Swiss franc (CHF).
thanks for the post.
I also expect, at some point, those who are short the USD to collectively "take profits" while the PMs are going up simultaneously. The Euro, with such widespread social breakdown in France, is bound to start seeing some headwind by comparison. That economy is also hanging by a thread.
Gold.
So in your opinion the USD is overvalued against another fiat currency, gold - which, if you look at the charts, may just be at the top of its own bubble?
A rather brave call IMO - I prefer trades with fewer risks.
As long as Gold is accepted in 191 countries in the world for the things I need, it is my Personal Debit card, okay
Picking tops and picking bottoms is for chimpanzees.
today was the top, I can just feel it.
DXY and FOREX is a smokescreen. Ignore them. All paper fiat currency is fungible through FOREX. It is impossible to value fiat currency vs fiat currency. Just watch spot gold and silver for the truth.
Then gold is finding resistance which may correlate to USD finding long-sought support.
Yes, finally resistance after 10 years. I was wondering when that would occur.... ?
The FLOOR is support for the dollar. I.E., the floor as in floor of an x,y axis.
The Fed wants a strong dollar obviously. Everything they do merely drives oil to higher prices which are textbook deflationary to the real economy.
Higher prices will only lead to a collapse in demand, you can't have your cake and eat it too, benny boy.
The Fed wants a strong dollar obviously?
Did I wake up on another planet?
I think he meant, "The Fed wants a strong Yuan"
They want expensive bonds, not an expensive dollar. It is the weak dollar that is driving oil prices; that and flat supply and level/increasing demand. When supply decreases, the whole game is top ticked.
????????
The Fed wants a strong dollar? Really?
i guess that I missed something, somewhere, with all of this $Trillions QE2/
Dollar be damned talk.
Was sarcasm on?
Yes, and after 95 years they have nearly all the strength they want.
Go get James Turk/John Rubino's book, The Collapse of the Dollar immediately!
There is no 'support' from the 2 ply toilet paper dollar, only a technical bounce here and there. Even a dead fish flops around a bit from time to time. Actually I do hope the dollar Zombie pops a bit, derail the FED's stock pumping evil.
Even a dead fish flops around a bit from time to time.
Mostly when poked by the fisherman's boot. But dead it be yet.
Just busted a support and headed down. This pig (USD) is going to get roasted.
Can't hold 77 The FED is driving it lower!
One of the few tech methods that stands strong is one of the oldest, Fibonacci.
The trick is where do you start and stop the 0% and 100% lines. The answer is not always obvious, and often running form top to bottom of a 5 wave or 3 wave pattern works well. On my ES chart 1040 is roughly the bottom. See attached.
Check the "total market" DWC, we are also at an important Fibo. Investor complacency is high.
And Finally, right before the elections -- "The Housing Boom is Back", see newspaper headlines. I think I am going to buy some lemmings and hang out with them, at least they deserve some respect, :-)
http://oahutrading.blogspot.com/
One of the few tech methods that stands strong is one of the oldest, Fibonacci.
The trick is where do you start and stop the 0% and 100% lines. The answer is not always obvious, and often running form top to bottom of a 5 wave or 3 wave pattern works well. On my ES chart 1040 is roughly the bottom. See attached.
Check the "total market" DWC, we are also at an important Fibo. Investor complacency is high.
And Finally, right before the elections -- "The Housing Boom is Back", see newspaper headlines. I think I am going to buy some lemmings and hang out with them, at least they deserve some respect, :-)
http://oahutrading.blogspot.com/
Chart: DX
Channel up.
http://99ercharts.blogspot.com/2010/10/dx.html
Wrong is right and Right is wrong...invest accordingly!
Gold stocks are way underperforming the bullion price right now.
No doubt, the PigMen are already front running a huge correction in risk currencies and gold right now.
But for now, no reversal has been confirmed yet, so best thing to do is to stay with the trend but lighten up your position and/or get off margin.
Get off margin? What kind of chickenshit, unAmerican kinda talk is that. WhereTF am I supposed to get my adrenaline pump from?
http://www.monsterenergy.com/monstergirls/sonni-pacheco/
Is this thing on? Can you hear me in back?
Another perspective: a 23 year-old head and shoulders pattern with a target of 35.10.
http://www.safehaven.com/article/18584/a-look-at-the-us-dollar-index
Another perspective: A 7 year-old inverse head and shoulders pattern with a target of 108.
(Could not resist but the author does mention that possibility...despite the dollar being flawed every one and his brother is short so another 2008 type event could trigger massive short covering...time will tell).
The dollar ALWAYS burns. Up or down, full of surprises.
I like my euro like my women...in tight (stop) shorts
Any reason the market just went vertical (again)?
Um, Bernanke pumped it I'd assume?
Tyler, the **ONE** thing NOBODY is talking about, is my armaggedon scenario: DXY down, SPX down, border crossings up ;)
Bernanke do whatever you want, I dont care I'll never buy any stocks again no matter how hard you try to create a stock mania market frenzy! I'd never put any money within these criminals reach...what it would take is about 200 perp-walks from Wall St and about 500 perp walks from Crapitol Hill before I'd ever play with these snakes again.
preach it
+1
Watch out you're starting to sound like we've hit bottom.
looks like a temporary bounce to 80...shortly
Benoit Mandelbrot
20 November 1924
14 October 2010
Mandelbrot was most famously known for his work in exploring the mathematical shapes known as “fractals.” Fractals are shapes that reproduce themselves infinitely–each offshoot of the shape is an approximate miniature of the original shape (including the offshoots). This property (each part being a miniature of the original shape) is called “self-similarity.”
http://blogs.reuters.com/justinfox/2010/10/18/why-didn%E2%80%99t-people-in-finance-pay-attention-to-benoit-mandelbrot/
A moment of silence please.................................................................
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+1
The Shit barometer is rising!
http://www.stungunstopepperspray.com/
the trend is your friend, the dollar is not.
As long as Gold is accepted in 191 countries in the world for the things I need it is my Personal Debit card, okay
Yada Yada Yada.
DOW+70
S&P +7
NASDAQ +8
Now back to discussing who is on control here. Hint: It is the Fed.
WHOA really?
I'd say it is about time for King Dollar to reverse course. Perhaps moments after November 3 meeting closes with no change to Fed statement.
remember that all fiat currency falls to zero given enough time. the "relative value" between now and *when it is worthless* becomes the real point of contention. the JPY was at these levels after the last recession in 1993-1995 and commodities ran up quite nicely. JPY came back down then and it will do so now as well. the S&L crisis was the big deal last time. adjusted for inflation, it may have been of equivalent value.
the idea that somehow "government issued or federal reserve issued" representative-value-paper-currency "should" be a store of value over time is also a bit squirrley. for all of human history, NEVER has fiat money been a store opf value. the "buck" owes us nothing, and truth-be-told--- most people with common sense only own enough of "their money" for a few months living expenses. beyond that, one would hope that people owned a broad collection of everything else.
we endeavor to acquire a job or better yet--- other assets which "create" enough of this refuse to go shopping at Costco.
no problem, really, unless you "live in cash" whick is a mistake anyway.
consider the wisdom, diversify broadly, let them inflate--- it has never been different. live and spend BELOW your means, reinvest what you can. go back to sleep or better yet--- enjoy your family.
shawn a. mesaros, pamria, llc
74 is only a heart beat away
One missive from Armstrong is worth 25,000 from the fucktards at GS, BAC, C, JPM, et al...
http://www.martinarmstrong.org/files/Nice%20Try%20but%20No%20Cigar%2010-...
All the fucktard rubbish reports posted here are mis-leading folks. Stick to the truth tellers, not the fucktards. (Lenoir is not in that group)
Outstanding essay. Thanks for the link.
Great history lesson, but I need to read again and think more about the forecasts. Americans have one advantage over other countries that should be used: the state judiciaries (and their constitutional rights) are a powerful layer between the people and the [federal] government.
Thanks Nick I will look to close my dollar shorts if we see much sign of a rally. It will be a shame though as they have gone so well they feel almost like friends...
Commercial paper has disconnected from underlying asset values. Underlying asset values are collapsing while paper is in a bubble.
Fed / gov is trying to keep paper bubble inflated irrespective of underlying asset values collapsing.
Why? If paper bubble collapses, banks are bankrupt, Wall Street is bankrupt, financial system collapses ...down to where Main Street already is.
Yes, who knows with planned markets. It's not planned for my benefit. I'm staying ouut of this one and getting assets out of the system.
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Thanks for taking the time to discuss this, I feel strongly about it and love learning more on this topic.
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