The Running of the Dollar Bulls

The running of the Dollar Bulls; is it still going?

A week ago I wrote that my view as regard a strengthening dollar was definitely on the charts.

Friday’s USA job report missed the estimated target by one of the largest margins since a year ago, yet the employment rate dropped? The immediate knee jerk reaction was that’s it, there is now way the Fed will increase interest rates any time soon and for the best part of about two minutes the US Dollar looked like it was about to get the hiding of it’s life.

Two minutes and 10 second later, logic prevailed and just like an athlete who squats down low so he can jump even higher there was the bounce. While the USD/JPY screamed out “not so fast buddy,” across the board we saw the USD continue strong. Then, like a car that has run out of gas, it settled down to about the same levels as the day before.

Is the USD really strong?

I don’t think so, but in the land of the blind the one eyed man is king. Although logic can be rare in our industry, we believe that right now a strong dollar makes sense. With the exception of the JPY and under extreme circumstance the CHF, there really seems no strong alternative right now.

Speaking of which, the JPY is certainly regaining its sight and surging right now.

Just breathe.

Like I have always taught people in our Forex education classes; just breath and take a step backwards. It’s somehow clearer from a distance. The best way is to refer to your long-term weekly chart and suddenly the big picture emerges. Our Forex Signals lately seems to be support this thinking also.

As of now when we look at the weekly chart, is still appears that Dollar Bulls keeps running across the board. Will the Fed’s influence lock horns with the Dollar Bulls? We should find out shortly.

THIS COULD STOP THE BULLS IN THE SHORT TERM,

Dollar Bulls: Looking at the charts.

Here is my weekly charts today of the 2 big major; the USD/JPY and the EUR/USD. I have included our Trend Meters that confirms this view.

As we see here our weekly chart shows the EUR/USD still in SHORT mode but it’s made a strong comeback. Let’s revisit this in another week – It’s now at a level where it could break either way. Will the USD Bulls allow this to happen?

Our weekly USD/JPY paints a more dramatic picture.

Look at it surge! It is like a currency on steroids. Ever since global stock markets came under fire 2 weeks ago; the safe haven Yen has attracted the big money. In my almost 20 years of Forex, a move like last week and with the massive price action shown in the big orange candle almost guarantees that we can expect another lower week or two ahead.

The momentum SHORT is extremely strong for now; I expect to see our Green MA line to lead the way by this time next week.