The Weekly View: We Remain Dollar Bulls
My thanks to Rod Smyth, Bill Ryder and Ken Liu for their useful letter, published by RiverFront. Here is a brief sample:
The technical case for continued dollar strength is compelling. Following a five-year consolidation, which saw rising lows, but also falling highs, (dashed lines in the chart below), a new up-trend has begun. We see technical support between 90 and 92.5 (the one-half and one-third retracements of the rally from 80 to 100). A break below these levels would require a re-evaluation of our view. We do not expect a breakdown below these levels, especially since sentiment (bottom panel) is at the low end of the neutral zone.
Here is The Weekly View.
The last nine months have seen some big currency swings, from the Dollar Index’s surge to the slumps in currencies of primarily commodity exporters, and a sharp decline in the Euro. I think the next nine months will be quieter for currencies.
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