Dollar Index chart above shows that dollar has freed itself on the upside after a multi-month consolidation. Dollar Index is majorly weighted against Euro and all of us know what fate is Euro having these days. Atleast dollar is not fighting for its survival. I will not go into details of currency wars that is happening, but looking at the chart gives a feel that Euro is going to be serious trouble.
$USD has broken out from range, broken above 200 Day moving average and is also trading above the Ichimoku clouds. So we have enough reasons to be bullish on Dollar, the next resistance is 200 week moving average at 78.75 and weekly Ichimoku cloud around 80. I am expecting all these to be cleared after some amount of consolidation around 78-80.
The bullish moves of dollar though not necessarily is negative equities, but the reason dollar is making such moves is negative for equities. Investors are fearing Euro and Euro assets, either they expect Euro printers to run full time or they fear some kind of Euro structuring which will deal with Greece and maybe some more defaults. Whatever be the case, there is hardly any reason to be a stock market buyer!
0 comments:
Post a Comment