This morning I remarked on the dollar, among other things; even making a small joke about whether policy makers, or Fibonacci, would "win" out. And pointing out of course, Fibonacci doesn't tell us whether the dollar will reverse to uptrend ... but does tell us levels where to look for that as a distinct possibility. Today saw interesting action in UUP, the ETF that tracks the US Dollar Index ($USD). I've posted charts of UUP and $USD here (click any image to see it larger/more clearly). Buying volume was relatively good today. On the other hand, stepping back to look at the daily chart of UUP at right, you can see that there have been other up days with pretty good buying volumes, and they didn't prevent UUP and the US dollar from continuing to edge lower. From a Fibonacci perspective, you can see on my monthly chart below that there's a level very close by, at 77.92, that may provide support if $USD tests it (and yes, even if $USD goes under it and then triggers and reverses back above it). If that level does not provide support, there's another level at 74.75 that may. (This lower level also has a related area of Fibonacci support, based on a 1.382 extension of the range from the late 2008 highs down to 77.69.)There is also chart support/Elliott Wave (prior 4th wave) support at 75.89 based on the September 2008 low.
Like the VXX, which I posted a little while ago along with a discussion of how to consider and use Fibonacci numbers like this in trading, especially depending on time frame - the indicators after having moved up recently, swooned again. The indicators are only now beginning to come back to a position where they may curl upward again. So, today's buying volumes helped, but it's too soon to confirm (for example, for KI$$ purposes) that the dollar has finished a solid low. Just be aware that it may be close to that, and should be observed for how the dollar may react, along with other currencies and other asset classes.
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