This chart is very straight-forward. The market traded a little below 80 about a month ago. The dollar has clearly broken through that level. In addition, all of the moving averages are pointing lower and the smaller SMAs are below the longer SMAs. All of these factors add up to a high probability of further declines.
2 comments:
Based on the long-term trendlines, what is the next area of support?
I read in the Economist that there's a feeling that emerging market Central Banks are starting to be able to pump money supply out there as never before.
Do you think that - slightly counter-intuitively - this might actually be putting a cushion under dollar demand as firms - say, in India and Russia - inevitably convert local currency into reserve dollars?
Not all currencies are at all equal. Very few people in the West save their money in rupees. So money-supply growth in the developing economies is not offering a replacement commodity.
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