Posted On: 08/18/2016 7:29:35 AM
Post# of 52006
What do you think.
I don't follow the dollar.
But that is otherwise not a failing chart.
If technical indicators are to be trusted, then the dollar looks to be on the verge of a prolonged downturn, according to an analysis by Bespoke Investment Group.
After tracing a “double top,” the Bloomberg dollar index—Bespoke’s preferred gauge of the greenback’s value—has broken down out of a so-called wedged pattern while also approaching the 38.2% retracement level of its 2014-2016 rally.
Among chart watchers, a double-top pattern usually signals the end of a longer-term bullish trend and is market by two rising peaks in a given security, while a wedge pattern can indicate a continuing trend. In this case, it represents the extension of recent weakness in the buck DXY, -0.31%
The dollar’s slump also comes after it twice tested and rejected a 23.6% retracement, or reversal, of that historic rally. Bespoke illustrates these moves in the chart below.
In our view, the impetus here is now to the downside with the breakdown of the wedge (a shorter-term formation) we’ve noted on the chart,” the analysts said in a note.
If the Bloomberg index breaks below its 38.2% retracement, the next likely resistance level would be 50%, or 3.3% below its current level, followed by the 61.8% retracement. That is 5.9% below its current level.
If that happens, the analysts said, expect Treasury yields to rise and commodities like crude oil to continue climbing, and emerging-market assets SCHE, -0.34% DEM, -0.41% to benefit, the analysts said.
Investors who want to bet against the dollar can buy the PowerShares DB U.S. Dollar Index UDN, +0.00% The index owns dollar index futures and moves roughly inversely to the dollar, the analysts said.
Technical analysis is commonly employed by market strategists to analyze price trends in a given asset or currency. Investors often weigh technical signals alongside an analysis of the fundamental factors that might impact an exchange rate.
I don't follow the dollar.
But that is otherwise not a failing chart.
If technical indicators are to be trusted, then the dollar looks to be on the verge of a prolonged downturn, according to an analysis by Bespoke Investment Group.
After tracing a “double top,” the Bloomberg dollar index—Bespoke’s preferred gauge of the greenback’s value—has broken down out of a so-called wedged pattern while also approaching the 38.2% retracement level of its 2014-2016 rally.
Among chart watchers, a double-top pattern usually signals the end of a longer-term bullish trend and is market by two rising peaks in a given security, while a wedge pattern can indicate a continuing trend. In this case, it represents the extension of recent weakness in the buck DXY, -0.31%
The dollar’s slump also comes after it twice tested and rejected a 23.6% retracement, or reversal, of that historic rally. Bespoke illustrates these moves in the chart below.
In our view, the impetus here is now to the downside with the breakdown of the wedge (a shorter-term formation) we’ve noted on the chart,” the analysts said in a note.
If the Bloomberg index breaks below its 38.2% retracement, the next likely resistance level would be 50%, or 3.3% below its current level, followed by the 61.8% retracement. That is 5.9% below its current level.
If that happens, the analysts said, expect Treasury yields to rise and commodities like crude oil to continue climbing, and emerging-market assets SCHE, -0.34% DEM, -0.41% to benefit, the analysts said.
Investors who want to bet against the dollar can buy the PowerShares DB U.S. Dollar Index UDN, +0.00% The index owns dollar index futures and moves roughly inversely to the dollar, the analysts said.
Technical analysis is commonly employed by market strategists to analyze price trends in a given asset or currency. Investors often weigh technical signals alongside an analysis of the fundamental factors that might impact an exchange rate.
(0)
(0)
