Wednesday, July 28, 2010

Equal-Weight US Dollar Index -- Update

Some weeks ago I mentioned the possibility of downside for the dollar, but suggested the primary uptrend would remain intact. The downside came, and it turned out to be persistent. But I think most of the damage is done at this point; I doubt the dollar (basis my USDX-EW or the trade-weighted index) will drop much more from here.

An updated chart of my equal-weight index is below. While the index has dropped below the Fib speedline, it has so far held the middle speedline. We may not see a real rally develop until it meets the Padovan speedline, but you risk missing the boat waiting for that to happen.