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PowerShares DB US Dollar Bullish ETF Message Board

  • keybotthequant keybotthequant Aug 18, 2011 12:26 PM Flag

    Dollar Charts - Upside Ahead

    Weekly and Daily charts show upside for the weeks ahead.

    Weekly Chart:

    The majority of traders have been calling for the demise of the dollar for months. The chart actually continues to bottom and produce a healthy posture for further and sustained upside moving forward. In a world of fiat money, the U.S. will retain its advantage as the shiniest piece of garbage. Note the blue falling wedge that helped bounce price in May. The indicators were positively diverged providing some fuel for the upside but note the double blue circle for RSI showing an ever-so-slightly lower low. That pesky RSI has caused the dollar to languish along on the low side the last few weeks since by making the lower low, RSI wants price to come back down to test the 73-ish level. With the price action for the last three months, this negative energy is slowly getting burned off. Note the thin red lines showing all indicators higher over the last four months, thus, if price touches 73-ish, that would be positive divergence and lock in a bounce for the dollar.

    Thus, the projection is that the chart continues to bottom here and extended upside for the dollar is expected moving forward. The chart is showing an inverted H&S vibe that can be explored closer on a daily chart. Also note the vertical symmetry with 73 and 89, that is a difference of 16, half of that is 8 which is the 81 level; all these levels critical S/R for the dollar.

    For dollar charts use search box above for keystone speculator or view at stockcharts public charts list keystone speculator.

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    • Bases can work to the downside. Dollar fundamentals bad as well as Euros,Yen. Emerging markets currencies may get stronger and developed countries weaker. Not all bad though. We can export a bit more.

    • Funny how both the dollar and gold both up today. I think both are a flight to safety but one has to be wrong.

    • Daily chart shows the inverted H&S's.

      Daily Chart:

      Dollar daily chart allows a closer look at the inverted H&S's. The blue lines show a head at 73 and neck line at 76, thus, when 76 is broken to the upside, the target would be 79. The red inverted H&S shows a head at 73 and neck line much higher at 81, thus, should 81 become pierced to the upside, the target is 89. The green lines show all the indicators very positive and constructive for upside for the dollar.

      The ADX shows a strong down trend was in place during October 2010, so the move down in the dollar was real and had legs. Note how price did come down to make the May 2011 bottom verifying the projection of the ADX strength. The additional peaks in ADX at 30-35 were tenuous concerning price action, showing that as soon as price was trying to sustain a strong trend, the ADX fell lower again. Thus the dollar has simply motored along thru the 73-81 range for a year without any strong trend in place (despite the price move down that occurred). This confirms that the charts are in tune with bottoming now and constructive for the upside moving forward.

      As the dollar moves up, it will serve as a trigger for Chairman Bernanke to announce QE3. Price projection is upside ahead, the 76 neck line will give way ushering in a move to 79.

      For dollar charts use search box above for keystone speculator or view at stockcharts public charts list keystone speculator.

 
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