FX Daily Report: May 02, 2013
GFM Research | May 02, 2013 03:29AM ET
The Dollar Index (DX) is trading at 82.26 ranges, near to the support of 81.80 of the medium term trend range bound between 83.40 and 81.80 formed during last couple of months; bias is still negative. Historic correlation between the bench mark equity index of Dow Jones Industrials (DJIA) and DX suggests negative bias still prevailing for the US Dollar.
Dow Industrials (DJIA) is trading consistently beyond all time high of 14200-14300, a historic high made during October 2007. This indicates a new rally is under progress, but the momentum has run out of gas at 14800 ranges. Only a monthly close below 13700 would force us to rethink the bull trend.
The historic DX Vs DJIA correlation suggests the long-term trend is still Dollar bearish, but only while the Dollar Index doesn't close above 84.50 on a monthly basis. The short and medium term trends are bullish.
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