The Sneaky Dollar Breakout
- Posted by Greg Harmon
- on August 20th, 2014
I have been quoted as saying the US Dollar Index is just not that interesting. And for the most part I stand by that. It has traded in a tight range between 79 and 81.50 for about a year. The world has been about to end at least a dozen times over that period yet it has stayed in a 3% range. Boring. But with that backdrop it is time to start watching it again. You see, over the last 3 weeks it has been up against the top of that range, unable to get any separation. But yesterday (August 19th), it finally broke higher.
Today the US Dollar Index moved higher and closed over 81.75 for the first time since September 9, 2013, almost a year. As it did this the momentum indicators are supportive of more upside. The RSI is in the bullish zone and the MACD is turning back higher and about to cross up. Its hard to see, but the top of the Bollinger bands are also opening to allow for more upside. Should this whole 1 year period turn out to be a rounded bottom or a Cup and Handle (technical patterns) there could be upside to the 83.50 area. A big move for this stable asset and one that would garner even more attention from longer term investors. For now the short term trader can be excited, but it is still boring for the investor. But it is time to start paying more attention.
Get my book, Trading Options: Using Technical Analysis to Design Winning Options Trades.
____________________________________________________________________________________________________
Want to learn more about Dragonfly Capital Views?
Dragonfly Capital Views Performance Through August 2014 Expiry and sign up here
If you like what you see above sign up for deeper analysis and trading strategy by using the Get Premium button above. As always you can see details of individual charts and more on my StockTwits page.
The information in this blog post represents my own opinions and does not contain a recommendation for any particular security or investment. I or my affiliates may hold positions or other interests in securities mentioned in the Blog, please see my Disclaimer page for my full disclaimer.
blog comments powered by Disqus-
Gregory W. Harmon CMT, CFA, has traded since 1986 and held senior positions including Head of Global Trading, Head of Product Development, Head of Strategy and Director of Equity. (More)