In today's column, I presented a case for a short-term bounce in the dollar. Will it happen? Maybe, maybe not but the evidence does at least give it a chance.
Sterling has broken down (see the chart of the day at the www.quicktakespro.com home page). The loonie has flattened out and and has room to go to short-term support. The Mexican Peso has been flat vs. the dollar since April.
These are warning signs of two minor and one mid level currency vs. the dollar index. The other mid-level is the yen and it remains in a strong rising trend. The 800 pound gorilla (or 57 stone gorilla for you pre-1985 Brits) remains the euro as it is about 57% of the dollar index. And it, too, remains in a rally.
I'll have more in my monthly Marketwatch column due out Thursday but I can say now that there are some momentum issues in yen and euro.
And just in case you think the entire weakness thing in since the greenback peaked in March is thanks to the yen, think again. The Aussie dollar is the thunder from down under. Watch for momentum issues here, too.
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