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US Dollar

Posted by nexvucapital on November 26, 2012

The US Dollar broke its up trend last week at an important level of resistance for a number of reasons if we look at the weekly chart.

USD Weekly Chart – November 24 2012

The point of resistance included the mid-point of the bollinger band (81.00) ( and the January 2012 and 2011 previous highs as well as the 50 Day Moving Average (80.62). This turn also set up a potentially negative head-and-shoulders pattern on the chart which was put in place during 2012 (S, H, S). Any good news for the Euro or the Yen would continue this down turn with support at the 200 day moving average (79.63) and on the bottom bollinger band (78.20).

From a short-term fundamental perspective any resolution to the Fiscal Bluff would be a short-term negative on the flight-to-safety trade which supports the US Dollar. Positive news out of Europe would support the Euro and the move down in the Yen is looking tired. As stated on the weekend the commodity trade looks like it is setting back up for a run.


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