US Dollar Index - DX

[CanOz]

I thought i would start this thread to help some of us newer FX traders identify trend changes/continuation patterns in the major currency.

To me, this is another pivotal moment in the DX which could define the trend for the next few weeks, even months with the passing of the bailout package. The USD could come under pressure now. Technically the chart looks oversold and depending on what happens next week we could be seeing some bearish divergence.

Anyone care to comment on the direction of the USD in order to help us take a view on the markets for coming week?

Cheers,


CanOz

 

[Lucky_Country]

Interesting time for the US$ personal thoughts are the 80 point marky on the index is known resistance once that is reached whih it has been the dollar will tumble.
Now is a good time to enter gold and other commodities as the dollar pulls back.

 

[CanOz]

Interesting time for the US$ personal thoughts are the 80 point marky on the index is known resistance once that is reached whih it has been the dollar will tumble.
Now is a good time to enter gold and other commodities as the dollar pulls back.

Interesting times indeed. Commodities i feel will still continue to decline as global demand softens, but what effect a declininig dollar will have on them i'm not sure. Possibly the decline in commodities may not be as swift as the first leg down. I'll try and post a chart of the CRB later.

The other thing not shown on this chart are the bollinger bands, FWIW a pullback is usually, but not always preceded by a touch of the upper bolli, but no such event has occured. This leads me to think that some consolidation at these levels may happen before a trend emmerges.

Anything can happen obviously, but we're trying to anticipate the possibilities.

Cheers,


CanOz

 

[CanOz]

Futher to the reference to commodity prices, which will influence AUD and CAD. Here is a chart of the Continuous Commodity Index, which clearly shows a new low. Trend remains down but we could see a bounce, which with dollar weakness could be quite swift.

Cheers,


CanOz

 

[Lucky_Country]

Low commodity prices are also accelerating production declines with marginal producers being hit.This should offset some of the lower demand scenario.
What is interesting is the weakness of the AUD which is helping AUS exporters and the talk of interest rate cuts next weak could also weaken futher against the USD.
Will the FED be cutting interest rates soon is another quandry.

 

[CanOz]

Low commodity prices are also accelerating production declines with marginal producers being hit.This should offset some of the lower demand scenario.
What is interesting is the weakness of the AUD which is helping AUS exporters and the talk of interest rate cuts next weak could also weaken futher against the USD.
Will the FED be cutting interest rates soon is another quandry.

Great points IJH. I'm wondering too about the truth of the coordinated rate cut scenario.....it could be a volitile week for currencies, and it may take a few days for the main pairs against the dollar to find some direction. Have the markets already priced some of that in?

Cheers,


CanOz

 

[CAB SAV]

I also can see US$ heading down and an wondering if this might stop oil slide or even push oil up which would be another disaster for the yanks?

 

[CanOz]

Oil looks certain to test the recents lows first though. This week should revela many things. Everything is at interesting levels again.

Cheers,


CanOz

 

[Lucky_Country]

Well the oil scenario is a very interesting one.
The FED wants to cut rates with the little room it has left to do so but doesnt want inflation. A rising USD will reignite inflation via oil but the FED wants to stoke the economy and get out of the ressesion imo.

 

[explod]

I do not see a lot of strength coming for commodities. Consumer spending is falling in all industrialised countires which will dampen demand for this sector.

I have always seen currencies and gold as more related to the financial sector. GOLD and SILVER not within commodities. Looked at this way make the dynamics of gold and the US dollar easier to understand.

The US dollar index will still maintain some support, at least in the short term due to fear and the recent new knowledge to the general that Europe is also in big financial trouble. I think the Aussie has been oversold and its return to strength will mark the next downleg of the US$ index. Then US gold will rise.

 

[CanOz]

This morning there is a flight from risk as the Yen gains against the buck.

US futs are getting killed already. Most currencies gapped open this morning, taking with it my stop on the swissy that i left open (slept in too late). Good lesson learned there.

This only the second time i can remember such a gap open. Is this the final capitulation of the dollar, or a continuation of recent strength? I think i'll wait to see how this plays out today before entering any more trades.

Cheers,


CanOz

 

[Uncle Festivus]

Apparently they are printing special notes to use with the $700B bail out -

 

[CanOz]

Wow, we'e seeing a serious flight to "safety" today and the Dollar is looking pretty bullish again. This could continue, 10 yr treasuries are rising.

Cheers,

CanOz

 

[CanOz]

Nice flag to re test. Lots of opportunities in all the pairs lately. I think i need some holidays just to watch the screen all day!

Good trading.

CanOz

 

[CanOz]

Looking for a pullback in the DX and the related pairs this week. I'm only trading the AUDJPY for the moment, and I'll only take trades with the trend in this environment. The decline has certainly been swift.

Heres a couple of charts for Y'all.

Another week of volatility?

Cheers,


CanOz

 

[Uncle Festivus]

Hi CanOz,
Does MF Global have a DX contract to trade? Does anybody?

 

[CanOz]

Yeah, the DX future contract can be traded, but I'm not 100% sure on what exchange at the moment. I'll have a look for you on IB.

Heres the latest chart with the DX pulling back nicely. This may give some things a bounce, gold, oil etc. The question is, how quick to these mugs that got into treasuries want to get out again?

This is a great spectator sport!

cheers,


CanOz

 

[arco]

.

I know you can trade DX on some of the MT4 brokers platforms.

However, you would need to check with a few of the reliable brokers to see which one has it available.

rgds - arco

 

[BentRod]

Sure is boring with all the whipsawing in the FX market lately.

A Budgie Man special on 4 Hourly.....lets hope for a clean break and a bit of impulsing!

Given the DX is almost the EURO inverse, that has a bearish formation also, might try to add a few with tight stops if it breaks.

 

[BentRod]

Hi CanOz,
Does MF Global have a DX contract to trade? Does anybody?

IB should have the futs contract otherwise just trade the Euro.