Will the U.S. Dollar Charge Higher?
Feb 19th, 2009 | By Charles Delvalle | Category: Chart of the DayIt’s early in the morning in Delray Beach, Florida, and you know what I did? I made a cup of Jamaican Blue Mountain coffee (since I’m boycotting any unnecessary spending on pricey take-out coffees) and took a look at one of my favorite currencies in the universe – the U.S. dollar.
Now if you remember, I’ve talked about the dollar before. And I guess you can call me a “dollar bull,” if categorizing me makes you feel better about the “potentially blasphemous” words I’m about to speak.
On that day, the U.S. Dollar Index was trading at 85.71. Today, it’s trading at 88.
Had you followed my previous advice and dive into the forex markets, I bet you would have made out.
So heed my advice if you dare and take a look at this chart below…
This is a weekly chart of the U.S Dollar Index ($USD), which tracks the dollar’s strength versus six major currencies (including the euro and yen).
The first thing to notice is that the Slow Stochastic (at the bottom) and the RSI (at the top) can stay overbought for months at a time. This signals just how strong the dollars uptrend is.
Typically, stocks and currencies fluctuate from overbought back to oversold fairly quickly.
The next thing to note is that the dollar has run up to its November highs of 88.
If the dollar can break above these highs we could see it trading at 92 – 94 by next month.
So let me repeat the same recommendation I made 8 days ago:
“For you forex bugs out there, taking a long-term bullish position in the dollar should pay you greatly by the end of the year.”
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Charles Delvalle is a self-taught market-timing professional and value analyst who's followed and invested in the market for the past ten years. He uses a unique combination of technical and fundamental research to pinpoint rapid profit opportunities with stocks and options.
Charles is also a staunch contrarian and takes pride in finding undervalued sectors and discovering undervalued, cash-rich companies. He frequently mocks government stupidities and points out the "inaccuracies (or lies, take your pick) that government reporting frequently dispels as "truth".
