Tuesday, November 10, 2015

USD US Dollar Index Weekly Chart

Everybody and his brother is proclaiming a stronger dollar. The universal consensus is for a stronger dollar and lower euro and many call for euro parity (1.00) at any time forward. When the dollar began rising parabolically in late 2014, the pink box shows that the upward trend was strong. This strong upside dollar trend was in place until this summer and note that as the dollar spikes higher again over the last month the ADX remains in the cellar. This says the recent move higher in the USD is not a strong trend.

Price has ruptured the upper pink standard deviation line so the middle line at 96.59 (also the 20-weeek MA) is in play as well as the 50-week MA at 95.56. The red lines show negative-sloping indicators but it is not negative divergence since price did not make a new high (divergence occurs when price moves one way and the indicators move the other way). If price comes up to the red line at 101-ish and the indicators remain negatively sloped that will create negative divergence and the chart is cooked.

In the very short term there is momo; the short green lines have juice. The previous monthly chart posted shows negative divergence. The US dollar may bounce around at the current levels, and to 102 to fulfill the green sideways triangle, however, the expectation is for a pull back, likely to the 20 and/or 50-week MA's. The consensus is expecting the dollar to go to the moon, based on the Fed hiking rates, while the ECB eases sending the euro lower and dollar higher. However, the charts do not agree with this idea and the consensus will likely be very disappointed from now into the new year as a further move up in the US dollar is muted and USD price moves sideways rather than higher. This information is for educational and entertainment purposes only. Do not invest based on anything you read or view here. Consult your financial advisor before making any investment decision.

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