Time To Start Watching The Dollar Index Again
Dragonfly Capital | Aug 20, 2014 07:54AM ET
I have been quoted as saying the Dollar Index is just not that interesting. And, for the most part I stand by that. It has traded in a tight range between 79 and 81.50 for about a year. The world has been about to end at least a dozen times over that period yet it has stayed in a 3% range. Boring. But, with that backdrop it is time to start watching it again. You see, over the last 3 weeks it has been up against the top of that range, unable to get any separation. But today, Tuesday August 19th, it finally did.
Today the Dollar Index moved higher and closed over 81.75 for the first time since September 9, 2013, almost a year. As it did this the momentum indicators are supportive of more upside. The RSI is in the bullish zone and the MACD is turning back higher and about to cross up. Its hard to see, but the top of the Bollinger bands are also opening to allow for more upside. Should this whole 1 year period turn out to be a rounded bottom or a Cup and Handle (technical patterns) there could be upside to the 83.50 area. A big move for this stable asset and one that would garner even more attention from longer term investors. For now the short term trader can be excited, but it is still boring for the investor. But it is time to start paying more attention.
Disclaimer: The information in this blog post represents my own opinions and does not contain a recommendation for any particular security or investment. I or my affiliates may hold positions or other interests in securities mentioned in the Blog, please see my Disclaimer page for my full disclaimer.
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