The U.S. Dollar about to break out ?

The dollar has been oscillating between ca. 75 and 90 for the past years and has been muddling along the lower band of that range for months this year. It is a counter-trade to pretty much every major asset that trades in dollars, commodities and U.S. stocks and bonds being the most prominent. It is certainly very heavily shorted.

I think something may be about to give in those huge short positions. The chart looks kind of promising for going long, IMHO.

Thoughts?

[atsimg]http://files.abovetopsecret.com/images/member/dc88ac43a722.png[/atsimg]

reply to post by galdur


Thoughts. Buy silver. Buy gold. You will sleep better at night.

reply to post by yourmamaknows


If the dollar starts to run, these things will be crushed.

In fact, with the price of US bonds at a 70-year high and yields at a corresponding low - why would anyone accumulate gold and silver? In a deflationary environment (high demand for money) it makes more sense to preserve cash and pick up things later when prices have fallen.

reply to post by galdur


A chart longer than 6 years would tell a much clearer picture perhaps?

reply to post by AllUrChips


Perhaps, but as you notice the topic is about future trade of the dollar. I´m interested in what´ll do in say the next 12 months. It seems to me that it may very well be about to break out towards the upper band of its trading range of past years. If you have opinion on this, please elaborate.

reply to post by galdur


While the dollar may be doing good at the moment...it's only a moment.

Stocks diving?

Gold rising?

And the dollar rising as well at the same time? Makes me think something is up and it does not bode well.

Investors are being played.

reply to post by TDawgRex


Gold is extremely overbought.

Its 50-day moving average is at 1700 and the 200-day MA at just over 1500.

Seems very vulnerable to short attacks. I believe we saw them testing the defenses recently when gold fell $200.

In any event, IF the dollar is about to test shorts, this could put those long the dollar´s counter-trades in a very precarious situation.

Originally posted by galdur
reply to post by AllUrChips

 

Perhaps, but as you notice the topic is about future trade of the dollar. I´m interested in what´ll do in say the next 12 months. It seems to me that it may very well be about to break out towards the upper band of its trading range of past years. If you have opinion on this, please elaborate.

In that case it will go down.

reply to post by galdur


Me and a freind of mine were just talking about that today. He lost out on the dollar big time before he sold.

But in the long run, it's gambling, ain't it? Just without the bells...well...until the end of the trading period.

Originally posted by galdur
reply to post by AllUrChips

 

Perhaps, but as you notice the topic is about future trade of the dollar. I´m interested in what´ll do in say the next 12 months. It seems to me that it may very well be about to break out towards the upper band of its trading range of past years. If you have opinion on this, please elaborate.

And im pretty sure you mentioned the past of the dollar as well and also believe you asked for thoughts. Your snide comments are not needed.

reply to post by AllUrChips


The dollar has traded below its 200-day MA since January. Now that MA is down to about 75.5 and the dollar is just below that. This is a very important moment from a technical perspective.

reply to post by AllUrChips


There is no need to be surly. If you can´t or won´t identify arguments here then you should discuss other matters where you can.

You may have luck on a long for the next few weeks perhaps while the Eurozone has a meltdown but you're focusing too much on the chart and not looking at the extenuating circumstances - never a good way to trade.

The American dollar is being held up by Fed bond purchases - it's not a true demand for the dollar - there's tons of dollars and our government is so deep in debt that there is no way in hell they're going to allow a deflationary spiral.
We'll see a flood of devalued currency before they let that happen.

Here's a fun example I saw today (figures are a little old - we actually owe more than $14.2 Trillion now):

Tax revenue: $ 2.17 Trillion
Fed Budget: $ 3.82 Trillion
New Debt (Deficit): $ 1.65 Trillion
Total National Debt: $ 14.271 Trillion
Recent Budget Cuts: $ 38.5 Billion

Now remove 8 zeros and pretend it’s a household budget

Family income: $ 21,700
Money the family spent: $ 38,200
New debt: $ 16,500
Total debt already: $ 142,710
Cut the budget?: $ 385

Would you be able to pay back $142,000.00 if you were making $21,700.00 a year and needed $38,000.00 a year to live?

Eventually the world is going to cut our credit card up...there's lots of games to play to keep the show going but allowing deflation is completely counterproductive to holding the charade together...

When the world stops wanting the US dollar we will see run away inflation because we won't be able to give them away - not deflation.

It does look kind of enticing ...

[atsimg]http://files.abovetopsecret.com/images/member/6ac583af27ed.png[/atsimg]

reply to post by galdur


Yes it does...I'd say it's probably a decent move...for the short term...
Hold it too long and it'll vanish - we all know the end game - how else are we going to get out from under the debt load...
They have to devalue that currency - oldest trick in the book (almost...issuing the currency as a promissory note in the 1st place is probably the oldest)

Edit: Why is it that nobody wants to talk about money? I'd say 90% of market/finance/money threads die a quiet death...hmm

reply to post by coldkidc


Yeah, I´ve been hearing all that for years - while the dollar has swung in the range I mentioned.

The US seems awash in cash. It will continue piling into bonds. Govt. bond auctions will continue doing well. The demand for money will stay high. The dollar will go up. This is my estimation for the next 12 months at least.

I think the OP is right on the money - except my reasoning is a little more apocalyptic.

What's being experienced now is Euro-centric in nature - the debt shouldered by European governments from bad assets by their banks in 2008. As much as the rhetoric has been out there for the past 2 years about how the dollar was going down, the truth is -- outside of gold, which is already in bubble territory -- the dollar is the ONLY safe bet. And when the regional wars start in the European continent (starting this month with a regional Mideast war), and Obama has no choice but to finally leave both Iraq and Afghanistan and we essentially become isolationalist (this is inevitable, and part of the Depression pattern), Europe will flood its money here as protection.

Mark my words: the dollar will strengthen. But the price for that strengthening is a Pyrrhic victory for us.

reply to post by behindthescenes


I´m not sure it´ll be all that Pyrrhic.

The US economy is very dependent upon imports and therefore a falling dollar is very harmful in that it undermines the purchasing power of consumers and increases cost of economic input to businesses through commodities and raw materials. Both are poison to economic activity. Decreasing spending in a consumer driven economy leads to falling turnover and profits for small business (which absorbs most of the workforce) which at the same time has to deal with rising input costs. So, a rising dollar appears to be absolutely an economic necessity for the US at this point.

my thoughts are gold to 5000 an oz, then double to 10z in the parabolic state

25k is possible

meanwhile folks like you will be looking to play the us dollar bubble still, not realizing the bubble already passed and the illumined torch has already moved on from these shores to enrich the next country will do to the great bidding

reply to post by SuperTripps


It all revolvers around the dollar. That´s the big dog. Metals are really just like fleas sitting on that dog. I doubt that those gnats will control what the dog does, quite the contrary would be my guess.