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.

US Dollar Index Is Failing at the 80 Resistance Level, and Should Be Sold

By

The New Year is not looking pretty for the US Dollar Index.

PrintPRINT
MINYANVILLE ORIGINAL I know it has been a while since I provided an update on the currency market, but outside of the Japanese yen, there has not been much to highlight. After a tough trading environment in 2012, it is nice to have a clean slate to start 2013, so let's see where we might have some immediate trading opportunities.

The US Dollar Index looks like a screaming short to me to start off the New Year, which hopefully should bode well for risk assets and a strong January for equities. As you can see in the two-year chart below, the US Dollar Index is basically forming a large head-and-shoulders topping pattern. For over a year, the DX has not been able to rally past the low 80s; now it looks like that 80 mark should be significant resistance going forward in 2013.

The 50-day and 200-day moving averages will provide a good backstop to short the DX with a tight stop closing above 81. The longer-term pattern projects downside to the 74 level, so with the DX trading just shy of 80, the risk reward of a short position is pretty compelling here. A break below the 79 level would confirm this pattern, and this might be one of the most important charts to keep an eye on as we start 2013.

Good luck out there and best wishes for a happy, healthy, and prosperous 2013!


Click to enlarge
No positions in stocks mentioned.
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.
PrintPRINT

Busy? Subscribe to our free newsletter!

Submit
 

WHAT'S POPULAR IN THE VILLE