The only UN-BIAS way to look at it, is to chart the dollar, and let the chart decide.
$USD Monthly: the 38.2% retracement level is 90.02, this could very well be the "line in the sand", that the dollar NEEDS to be broken above to prove the deflation has more longer term legs.
$USD Weekly: as you can see by the RSI, the sentiment is now constantly > 50, which is now strong support, this currently is BULLISH for $USD (ie deflation)
$USD Daily: strong support from the rising 200ma
Impression: As long as the weekly rsi REMAINS over 50, the dollar remains in a longer term bullish trend here. (deflation). What is going to be perhaps very telling is what if the dollar breaks 90.02, IF it does, it's "suggested" we go to 95, for a 50% retracement.
My personal "opinion" is that we have much higher prices to see on $USD and much more deflation left here. Even though there seems to be money being printed left and right (and oh there is!), for the dollar to NOT have totally tanked already here in past couple months, to me is a sign of relative strength.
It's not as much individual inflation as a nation we try to accomplish, as it is our inflation COMPARED to other nations. If we are mashing the printing press button, yet they are all mashing it FASTER than us. (ie: the great race to devalue one's own currency). Then the dollar will still gain in value, and the usa will remain in deflation. It's all relative, and since we are "the big gorrila", it takes alot longer for us to crush our currency compared to the smaller guys.
But that's just my opinion, more importantly let's see if/what happens at 90.02, and continue to watch the weekly rsi, which i think its the best t/a signal here for this "watch" and let it tell us what it's going to do.
$USD Monthly: the 38.2% retracement level is 90.02, this could very well be the "line in the sand", that the dollar NEEDS to be broken above to prove the deflation has more longer term legs.
$USD Weekly: as you can see by the RSI, the sentiment is now constantly > 50, which is now strong support, this currently is BULLISH for $USD (ie deflation)
$USD Daily: strong support from the rising 200ma
Impression: As long as the weekly rsi REMAINS over 50, the dollar remains in a longer term bullish trend here. (deflation). What is going to be perhaps very telling is what if the dollar breaks 90.02, IF it does, it's "suggested" we go to 95, for a 50% retracement.
My personal "opinion" is that we have much higher prices to see on $USD and much more deflation left here. Even though there seems to be money being printed left and right (and oh there is!), for the dollar to NOT have totally tanked already here in past couple months, to me is a sign of relative strength.
It's not as much individual inflation as a nation we try to accomplish, as it is our inflation COMPARED to other nations. If we are mashing the printing press button, yet they are all mashing it FASTER than us. (ie: the great race to devalue one's own currency). Then the dollar will still gain in value, and the usa will remain in deflation. It's all relative, and since we are "the big gorrila", it takes alot longer for us to crush our currency compared to the smaller guys.
But that's just my opinion, more importantly let's see if/what happens at 90.02, and continue to watch the weekly rsi, which i think its the best t/a signal here for this "watch" and let it tell us what it's going to do.
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Landed on your site. Dollar going high need not mean deflation. Check 2000-2002 levels.
ReplyDeleteYou are 100% correct. I Changed the title to "dollar watch"....as we can't forget that thing they called the ".com bubble."
ReplyDeleteWhich is the same reason why dow 11,700 then was worth just as much if not MORE than 14,000 in 2007.
Thing is, if the dollar was not so strong during the .com bubble as well, then we would of gone MUCH higher than 11,700 on the dow.
While it need not *mean* deflation, we are clearly in deflation.
ReplyDelete