RSSQuick Dollar Technicals
By Chip Hanlon | June 11, 2008 | 11:06 AM | 0 Comments
Since our Michael Pento just wrote a fundamental piece on the U.S. dollar, I thought I'd follow up with a quick technical snapshot.
In the short run, I'm a bit torn but leaning negative. The small positive which makes me hope the dollar bounce may gain strength is that, on a Point & Figure basis, a move above 74 would notch the second straight double-top buy signal off the bottom, making a short-term move to the mid-70s very likely. And there would be room all the way up to the high 70s, even without changing the dollar's negative long-term trend. In other words, odds would increase with a move above 74 that this counter-rally could become quite strong.
chart courtesy of Dorsey Wright & Associates
On the other hand, the dollar was extremely oversold in March. Since then, it has worked off that oversold condition without rallying too far:
chart courtesty of stockcharts.com
That's very weak action which calls the slight dollar rally we've seen into question. The Greenback needs to make more technical headway soon or risk running out of steam and moving back to the lows.
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