Dollar Overbought

The sharp rally in the US Dollar index over the last few weeks has put it 4.43% above its 50-day moving average.  As shown in the chart below, the spread between the Dollar and its 50-day is at its highest level since mid-2000. 

While we believe the currency will remain in an uptrend over the next few months, it is probably due for a short-term pullback.

click to enlarge

Comments

[Outside Observer]

Is it just me or does the recent moves smack of concerted dollar intervention?

2008 Aug 12 11:57 AM

[SW Richmond]

You must always remember: there are NO circumstances under which the global banking system will NOT intervene to try to maintain Bretton II and the fiat money regime on which the entire existing global power structure rests. They MUST intervene, always and to the bitter end, regardless of any likely negative impact their intervention might have. The alternative would be to stand back and allow the destruction of the global reserve currency with no likely successor. And I remind all that there are no currencies right now that are backed by anything other than promises. Think about the implications of that.

2008 Aug 12 12:13 PM