This is no surprise when I say the US dollar is in a long term downtrend, but last month I noticed some strength in the dollar’s technicals which had me thinking that we might be in for a rally in this currency, but the recent action on the RSI monthly/wkly has me thinking otherwise. The inability of this currency on the monthly chart below (click to enlarge) to break above the 60 range is troublesome. Add in the fact that this relative strength index is making lower lows and is now below the 50 range, the bears really are making a strong case that this is a doomed currency.
The weekly chart below (click to enlarge) looks as if it’s heading back down to it’s lower trendline. One area I’ll be watching is whether the RSI goes below the 30 line this time, where it hasn’t been since ’08. If the dollar can’t find buyers that prevent it from going below the 30 line, we may turn up and try to rally to the upper trendline, but for now this is a market to be on the sidelines as I don’t see an edge.
It’s hard to believe when I started coming to Canada that $1.00 US dollar was worth nearly $1.50 Canadian loonies. I remember how cheap it was to go shopping or grab dinner…those days are long gone with the 2 currencies at par and the miserable HST Tax that British Columbia so wrongly enacted on it’s people, tacking on 13%. I have to laugh when economist say that inflation is tame.
Disclosure: No positions