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USD Index Continues to Slide
Pinnacle Digest writes: The US Dollar Index continues its fall from a 52 week high of 84.50 set in mid-May to 80.71 at 12:05 PM EST Friday morning. The USD is on track for its 4th weekly loss against the Yen, but one analyst, Gary Tanashian believes support will hold for the dollar and it will rebound shortly.
USD Index - 1 Year Chart
The Dollar must be becoming a key focus for the Federal Reserve as they are set to meet next week on June 18th and 19th to discuss policy options moving forward. Any increase in stimulus efforts, in an attempt to quell the ever increasingly frenetic bond markets, could send the USD through the floor.
Tanashian reviewed the USD on June 12th and since then has only dropped further, from 81.50 to the high 80s.
On June 12th, Tanashian commented that, "A Reverse Symmetrical Triangle has formed, which is normally a reversal pattern, which would mean from up to down. But USD is at a strong support area and is over sold."
Canadian and Aussie Dollar, Approaching Key Support Levels
Tanashian believes that when it comes to the commodity currencies of Australia and Canada, the chart says it all. The Aussie Dollar especially must find support here or else.
In regards to the current market environment, Tanashian concludes, "We are grinding out a change of character in the markets. I want you to remember the bull wise guys that were touting at the exact wrong time with their “it’s a new secular bull market!” and “it’s a GREAT ROTATION out of bonds and into stocks!” (well, they got it half right) bullshit."
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