U.S. Dollar in a Large Energy Field, Capable of Carrying it Much Higher

The dollar index happens to be lower for the week as of this writing, however it is higher for the month and also the quarter. In fact, a close around current levels would represent the best close in three quarters for this index. We continue to be long this market based on both weekly and monthly Trade Triangles.

However, we would like to see this market begin to gain some upside traction soon, otherwise it is in danger of rolling over and negating the powerful energy field that’s below this market. Let’s just be patient, and see how this market plays out on Thursday and Friday. This index is coming from a large energy field that is capable of carrying it much higher, possibly up to the 80.00 – 81.00 area. Intermediate and Long Term traders should maintain long positions with the appropriate money management stops in place.

The December Dollar closed higher on Wednesday ending a two day correction off Monday's high. The high range close sets the stage for a steady to higher opening on Thursday. Stochastics and the RSI are overbought, diverging and are turning bearish hinting that a short term top might be in or is near. Closes below the 20 day moving average crossing at 77.31 would confirm that a short term top has been posted.

If December extends the rally off August's low, the 75% retracement level of this year's decline crossing at 80.29 is the next upside target. First resistance is Monday's high crossing at 79.65. Second resistance is the 75% retracement level of this year's decline crossing at 80.29. First support is the 10 day moving average crossing at 78.07. Second support is the 20 day moving average crossing at 77.31.

Monthly Trade Triangles for Long Term Trends = Positive
Weekly Trade Triangles for Intermediate Term Trends = Positive
Daily Trade Triangles for Short Term Trends = Negative
Combined Strength of Trend Score = + 85



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