Monday, December 7, 2009
Last week, the U.S. Dollar posted a huge gain versus a basket of major currencies. The strong up move was triggered by a better than expected Non-Farm Payrolls Report which showed a
decrease in the unemployment rate from 10.2% to 10%. The pace of job losses also declined and there was a revision to the better in October.
Traders bought the Dollar on the thought that the Fed would begin accelerating its process of reducing stimulus measures while gearing up to raise interest rates sooner than
previously expected.
Technically, the move in the Dollar appears as a spike on the charts, but it did lay the foundation for a further rally this week by taking out the previous week’s high at 75.66. The
weekly chart is the one to watch for the best change in trend indicator. At this time the main trend will turn up when this index crosses the November top at 77.50.
The short-term range is 77.50 to 74.27. The retracement zone of this range at 75.89 to 76.27 is near-term resistance. We’ve seen this …
