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DOLLAR DUE FOR A RALLY ... On August 17, I wrote a message showing that the CRB Index had completed a five-wave advance and was due a correction (which appears to have started). The following day I did a similar analysis showing that the U.S. Dollar had completed a five-wave decline and was due for a rally. Chart 1 is an update of that mid-August chart. The boxed numbers show a clear five-wave decline from its March peak to its August bottom. Adding to my more optimistic view on the dollar was the positive divergence in its 14-day RSI (blue line). I've pointed out before that a positive divergences takes on more meaning when it coincides with the completion of a fifth wave. I also pointed out in mid-August that the dollar decline had coincided with rallies in stocks and commodities. That being the case, it would be logical to expect a dollar rally to coincide with pullbacks in the other two markets.
Chart 1
DOLLAR INDEX AT CHART SUPPORT ... Another reason to expect some buying in the Dollar Index is because it's in an area of potential chart support at its December low (Chart 2). At the same time, the Euro is starting to weaken from major resistance near its December high (Chart 3). That makes the Euro overbought and the dollar oversold. In order for a short-term trend reversal to occur, however, the Euro needs to break its August low and 50-day moving average, while the Dollar Index needs to clear its August high and its 50-day line.
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狗仔卡
发表于 2009-9-2 08:39 AM
发表于 2009-9-2 08:41 AM
