Elevator to Hell - A Look at the USD
posted May 13, 2006 at 03:28PM
US Dollar Daily
US Dollar Weekly
Technically the USD has broken sigificant channel support. The three or four bulls on the planet will pray that this resolves into a channel buster type move, and will sacrifice every chicken they can find in hopes of a move back over the bottom trend-line.
Even if that happens I doubt that it will mark a significant trading bottoms. Those usually occur only after you get some postive divergences on the weekly charts.
When you look at the ADX buying strength indicator (green line) you see that that nobody wants to touch the green-back with a 10 foot pole. And why should that change? I can see no reason. Impending military conflict with Iran will only add strain to a balance sheet that already should be sending conservative minds into convulsions.
It not just that the US is up to its eyeballs in hock, but even more the fact that they have nothing to show for it. It is not like that money has gone into completely refurbishing national infrastructure for the next century.
Now things are oversold, so some sideways consolidation is certainly in order, but all signs point for a major retest of lows in the near future.