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We return to the U.S. Dollar Index today as it has put in a rather strong performance. In one of our recent blog posts from last week we featured the Dollar and described what we refer to as a Stage One breakout. We believe we can term this most recent action of what is now the last three sessions, including today, as Breakout Phase Two.
In essence what has occurred and as illustrated by the chart above is that the U.S. Dollar Index has now broken out of a near to intermediate term channel as well as closing above its 50 day moving average for which will be the third consecutive close. We view these developments as positives for the Dollar. The channel breakout suggests an initial target of approximately 7800.
The effect of the declining Dollar on most every market has been chronicled throughout the financial news media. From the stock market to precious metals, energies and grains. If in fact the Dollar is preparing to make a “statement” and change its course the ripples could become widespread.
Good trading
Jeff
CB&S
Check in with us tomorrow. We plan to show something in the STOCK INDICES that should be of interest!
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