Wednesday, April 29, 2009

Is the U.S. dollar testing support, or testing my chart and hypothetical diagonal?

The U.S. dollar fell today, along with bonds continuing their move down. At first appearance it looks like the it fell under trendline support I marked on my $USD chart. Then again, I drew those trendlines a while ago on the bigger view of this chart, and as you can see there are prior price spikes underneath that line. $USD did push back up after having moved closed toward its lower Bollinger Band, too. So I'll have to see if it's merely "testing" my chart and the artfulness of my trendline drawing (or rather the lack of artfulness on my part in drawing that trendline). Clearly it will violate my hypothesis of a diagonal upward, if it makes a swing low underneath the one in mid-March. If that happens, it may move much lower in a C-wave down, or could even drop to new lows (as I suspect some are hoping, along with a big rally in gold). At least I am not seeing negative divergence on the daily chart (below), so it may be too soon to abandon this chart with its trendlines.


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