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PowerShares DB US Dollar Bearish ETF Message Board

  • keybotthequant keybotthequant Oct 26, 2011 1:17 PM Flag

    Dollar Weekly and Daily Charts

    Dollar charts ready to resume upside as the weeks move along.

    Dollar Daily Chart:

    Dollar daily chart provides a closer look of recent action. The red lines show the H&S that played out in textbook fashion, we followed that from the beginning; head at 73-ish, neck line at 76-77, target was 79-80, which was achieved, then the pull back occurred, now price is back down for a back kiss of the neckline. During the bullish run in September note the ADX pink box says the run upwards was a strong trend and not a fluke. The fall in the dollar in recent days no doubt fueled the commodities, equities and gold rallies.

    The falling wedge in place now is glaring, and along with the MACD histogram and stochastics positive divergence (green bars), a bounce is in order. The stochastics are oversold as well, with a double bottom so they have no where to go but up. However, the red bars show the RSI, MACD line and ADX wanting to see another matching or lower price than now, after a bounce would occur. Price is respecting the 200 MA, now at 75.8 so view that as strong support. Price is bookended by the 50 MA above and 200 MA below, thus, price is testing the horizontal support and neckline at 76-ish inside the 75.80 to 76.5 range; the move out of this range will be telling.

    Watch the RSI to see if it wants to move above the 50% level to favor dollar bulls. The black lines show the potential big-picture sideways triangle vibe now forming. Projection is for a bounce to occur for the dollar now, but, to satisfy the indicators wanting another low, a move down to test the 200 MA would be prudent in the days ahead, then price should begin its ascent again. Higher dollar is expected for the weeks and months ahead.

    Note Added 10/26/11 at 10 AM: For dollar daily chart, ran the Fibonacci retracements for the run up from 73.5 to 79.8. The Fib retracement support levels for the trip back down are 77.4 (38% Fib) which failed, 76.65 (50% Fib) which failed, and now the 62% Fib retracement at 75.91. Thus, consider 75.9 to be very important support. Along with the 200 day MA, the 75.8-75.9 is a critical support level for the dollar.

    Weekly chart and analysis available as well.

    For dollar charts use search box above for keystone speculator.

 
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