The USDX has been unable to clear the 81.50 level for some time now, though it did close right on it last week. This week however was a different story as the Dollar powered through this resistance breaking out of a 5 month long sideways pattern. It should be able to make a run to at least 83. If it can push past there it stands a good chance of heading to 84. That should be a big test of the currency. If it clears that, it will begin a trending move to the upside.
Hard to believe isn't it considering the fact that next to Japan, the Fed has been the biggest debaucher of the currency in terms of the sheer size of money creation it has embarked upon. It just goes to show how rotten the Yen, the British Pound have become and possibly the Euro might be. In other words, the US Dollar is the lesser of the evils.
Let's see, the US is running a $16 Trillion+ deficit with its leaders unable to agree on slowing the rate of spending (note that i did not say CUT SPENDING) by less than TWO CENTS on the Dollar and yet the Dollar is the currency of choice. Absolutely amazing is it not?
Note the ADX below (the dark line) is turning up from a very low level indicating the possibility of the beginning of a trending move. This line will need to to climb above 20 to indicate that this is anything more than a grinding move higher. Momentum however is positive.
"When misguided public opinion honors what is despicable and despises what is honorable, punishes virtue and rewards vice, encourages what is harmful and discourages what is useful, applauds falsehood and smothers truth under indifference or insult, a nation turns its back on progress and can be restored only by the terrible lessons of catastrophe." … Frederic Bastiat
Evil talks about tolerance only when it’s weak. When it gains the upper hand, its vanity always requires the destruction of the good and the innocent, because the example of good and innocent lives is an ongoing witness against it. So it always has been. So it always will be. And America has no special immunity to becoming an enemy of its own founding beliefs about human freedom, human dignity, the limited power of the state, and the sovereignty of God. – Archbishop Chaput
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