I have not blogged about the dollar index recently. On the monthly chart, one can make the case for a move up from the bottom of the symmetrical triangle where it will find resistance at either the longer term downtrend line (80.47) or the upper boundary of the triangle at 88.49. The move from 89.63 down to 74.15 (1,548) had a nice balance with the move from 88.66 down to 72.69 (1,597).
Any drop below 72.69 would be bearish. It would also raise the possibility that there is a double top in with the confirmation point at 73.50. The price target would be 69.81. No doubt that would bring on the same tired response from the US Treasury that “we support a strong dollar.”
Nonetheless, given the potential weakness in the Euro and other currencies relative to the USD, I think a rally is more probable.
Here’s the monthly chart:
© Dianne Fecteau, 2011. No part of this material may be reproduced in any form, or referred to in any other publication, without the express written permission of the author.
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