Don’t fight the Fed. “Purchases of $500 billion would add as much stimulus as reducing the Fed’s benchmark rate by 0.5 to 0.75 percentage point.” And today’s announcement was for $600 billion purchase of securities. The dollar is toast.
Tagged: Dollar RSS
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Teresa Lo
Daryl Guppy, a popular Australian chartist and a CNBC contributor, wrote:
The dollar’s recent strength has been explained by most market analysts as a result of the euro weakness rather than any fundamental support for the greenback. In fact, a closer look at the dollar’s chart – particularly the dollar index – suggests the currency may be primed for a collapse.The dramatic dollar index rise from $0.81 to $0.87 in recent weeks shows the chart’s developed a dramatic and possibly dangerous parabolic trend.
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The dollar index suggests the greenback will continue to stengthen until the end of June, with a target near $0.89-$0.91, before it collapses to a downside target of $0.81.
Does something going from 91 to 81 constitute a “collapse”? Shouldn’t a parabolic trend be PRECEDED by an actual trend?
What about the context? If anything, the Dollar has been in a multi-year DOWNTREND, and is now trading near the top of a triangle. Many traders would consider this to be a consolidation pattern before going lower, but if everything thinks the same, then ….