FX Daily Report: April 4, 2013
GFM Research | Apr 04, 2013 12:32AM ET
Despite the Dollar Index (DX) correcting, meltdown was witnessed in most asset classes. Direct vs. inverse correlation has been observed in both the DX and DJIA. The US Dollar Index (DX) could trade sideways, with medium to long term resistances seen at 83.40 and 84.20. Although the trend is still intact, it manages to hang on above 81.80 ranges. This indicates direct correlation.
The DJIA is trading consistently beyond all time high of 14200-14300, a historic high made during October 2007. A new rally is under progress, but the momentum has run out of gas at 14400 ranges. Only a monthly close below 13700 would force us to rethink the bull trend.
Until the DX doesn’t close above 84.50 on a monthly basis, the historic DX Vs DJIA correlation suggests the long-term trend is still Dollar bearish. However, hort and medium term trends are bullish.
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