The MasterCharts: #USD Dollar Index - Waiting for the upside breakout
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Wednesday, February 22, 2017

#USD Dollar Index - Waiting for the upside breakout


Attachment 1 is the U. S. Dollar Index long term Point&Figure chart. For the last 2 years the index has been forming a Broadening or Megaphone pattern. A breakout of 102 would signal that the index would be departing for a new uptrend.


The U.S. Dollar Index, which reflects a basket of currencies versus the U. S. Dollar, has shown some strength lately. Attachment 2 indicates the components of the U.S. Dollar Index. This is the index the Federal Reserve is watching.

 

The reason is once again the financial condition of Greece. As in the past a lot of talking is taking place among Brussel's politicians (EU), the International Monetary Fund (IMF) and the Government of Greece.

 

Most likely, nobody in the European Union has an interest to deal with the real financial crisis (haircut on government bonds, let Greece out of the EU in order to devalue the new currency) as the elections in France are just two months away. Some new funds will flow to Greece to calm down the game. In other words the problem will be postponed to an indefinite date.

 

Attachment 3 shows the EURO versus U. S. Dollar

long term Point&Figure chart. It indicates the dramatic decline of the EURO in spring 2014 from 136 to 105 in spring 2015. We are bullish on the U. S. Dollar and wouldn't be surprised to see the next downtrend to be started in the next few months.

 


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