Dollar Soars on Ireland Wreckage; Might Be Hammer Time
November 11th, 2010WARNING: This is not a recommendation to buy, sell or hold any financial instrument.
There’s still another trading day to go, but the dollar will likely print a weekly hammer-like candle off the support:
U.S. Dollar Index, Weekly Interval
Is this really a hammer? Not really. But the proximity to the support is causing me to squint really hard at it.
This is getting ahead a bit, but check out how the monthly candle is forming up:
U.S. Dollar Index, Monthly Interval
That’s looking much more like a real hammer.
There are weeks to go on this candle, though. I thought I’d give you a heads up, just in case.
Via: Reuters:
Doubt about Ireland’s ability to repay its debts spread further on Thursday, driving the euro lower and overshadowing G20 attempts to ease currency tensions and secure commitment to more balanced global growth.
Yields on 10-year Irish bonds rose to a record high over comparable German debt as some investors worried that Ireland wouldn’t be able to cut spending as planned and may require a bailout, with bond holders forced to absorb losses.
The euro was down 0.5 percent at $1.3717 EUR=, not far from a five-week low of $1.3670 hit a day ago, and was also lower against the yen, Swiss franc and sterling.
What does this suggest then – a higher dollar, lower commodity prices, falling S&P?
That’s right, if we go by the book.
But overlay the US Dollar Index on oil (I happen to use WTI because my free chart thing supports it) and notice what happened starting 4 November.
The dollar and oil both started moving higher together on 4 November. And oil has now broken out of its previous weekly range to the upside. Either one of these moves is a fake crank, or it may indicate that a geopolitical crisis is brewing in an oil sensitive region.
The dollar and oil will not move higher together for long… unless some serious shit hits the fan.
thanks for the heads-up on the WTI-dollar movements.
China’s Currency Revaluation
https://admin.connectpro.acrobat.com/_a816688188/p91038661/?launcher=false&fcsContent=true&pbMode=normal
Kevin,
You were right. Commodities and Equities both went down 2-4% the day after this post. Silver went down 6%.