Another Peek at the US Dollar

Apr 17, 2008: 11:46 AM CST

The US Dollar Index is still under pressure, and can’t manage to rise above its falling 20 day moving average.

Each time, price has found resistance about this average, and the index has yet to close above it since early February.

Of note, a triangle consolidation pattern has formed, which – depending on how the converging trendlines are drawn – price may be breaking now back to the downside in a continuation move.

Price is close to notching a new closing low and not immensely far from a new all-time low.

A weaker dollar generally helps large, multinational countries, but a weak currency generally is not a good sign for a nation’s economy. Strong economies tend to have stronger currencies, and in fact, most currencies continue to strengthen against the US Dollar (some of which are making lifetime highs).

Continue to keep an eye on this situation, as a turn back to the upside could likely be a ‘good thing’ for the broader US economy and stock market.

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