Sorry!! The article you are trying to read is not available now.
Thank you very much;
you're only a step away from
downloading your reports.

Weldon's Mini-Metal Monitor: U.S. Dollar - Technically Teetering...


...the U.S. Dollar, as a result of its rally, is now significantly 'over-valued' on a relative basis.


Editor's Note: This is Monday's edition of Weldon's Mini-Metal Monitor

For a variety of reasons, mostly Petro-China-Russia-ECB related, the USD is breaking down.

Note the new low in the med-term Rate-of-Change indicator and the confirmed sell-signal in the med-term Parabolic, as evidenced in the med-term technical perspective offered in the daily chart on display below.

1).gif" width="448" />

On a longer-term basis as noted in the weekly chart seen below, we observe a bearish Moving Average dynamic, and a seemingly completed A-B-C corrective pattern to the upside.

Of course we must note that the upside correction in the Dollar FAILED to even reach the FIRST of the Fibonacci retracements (38%) relative to the entire 3-year bear market. Indeed, a one-third correction in price over one-third of the bear-move time.

Simply put … this is a VERY bearish technical pattern.

Given that on a weekly closing basis, NYMEX Crude Oil prices set a NEW ALL-TIME HIGH on Friday, and that Gold is making NEW MULTI-DECADE HIGHS on a near daily basis, we could easily suggest that the U.S. Dollar, as a result of its rally, is now significantly 'over-valued' on a relative basis.

We wonder, is the USD responding to the potential NEED for a stimulus valve amid a weakening in the macro-support for equity market reflation?

OR, is the USD decline a symptom of what ails ya, the same ailments that are threatening to inflict the equity market reflation?

Or, is the USD responding to the increased RISK of holding USD, amid an EXCESSIVE GLUT in the global supply of greenbacks?

Indeed, the evidence on the offer within today's macro-data supports the final thought process, as both posted significantly smaller than expected budget deficits for all-2005, while they rejected all bids at today's weekly T-Bill auction thanks to a near-term fiscal surplus.

Whatever the case, there is one thing that is becoming increasingly clear; there is excessive global USD liquidity, and, officialdom is threatening to INCREASE the supply!

A renewed secular bear market in the USD would only serve to solidify our bullion bullishness.

PUBLISHER'S NOTE: We are offering a special, free-trial subscription to both the full-blown version of "The Metal Monitor" and our premier daily research publication, "Weldon's Money Monitor". Simply email us and insert the words Minyanville-offer into the subject line.

< Previous
  • 1
Next >
Position in gold
The information on this website solely reflects the analysis of or opinion about the performance of securities and financial markets by the writers whose articles appear on the site. The views expressed by the writers are not necessarily the views of Minyanville Media, Inc. or members of its management. Nothing contained on the website is intended to constitute a recommendation or advice addressed to an individual investor or category of investors to purchase, sell or hold any security, or to take any action with respect to the prospective movement of the securities markets or to solicit the purchase or sale of any security. Any investment decisions must be made by the reader either individually or in consultation with his or her investment professional. Minyanville writers and staff may trade or hold positions in securities that are discussed in articles appearing on the website. Writers of articles are required to disclose whether they have a position in any stock or fund discussed in an article, but are not permitted to disclose the size or direction of the position. Nothing on this website is intended to solicit business of any kind for a writer's business or fund. Minyanville management and staff as well as contributing writers will not respond to emails or other communications requesting investment advice.

Copyright 2011 Minyanville Media, Inc. All Rights Reserved.
Featured Videos