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The US dollar can decline further. However, brief upside corrections are still possible, as the crude oil market could temporarily test 88.00-80.00.

There will be another wave up for commodity prices.

Decisions taken in the US and in Europe are forcing other central banks to ease their monetary policies in order to keep their currencies competitive against the US dollar and the Euro currency. Inflationary trends will maintain commodity prices well supported for a few more years. In particular, gold could rise to 1920 per ounce, despite commercial demand declining, if the level of 1835 per ounce is overcome. Declines should instead find support at 1760/1720. In effect, a rebound of the US dollar to 80.80, and eventually 81.60, is still possible, considering that crude oil might try to test the important support line at 88.00. World demand for crude stays weak at the present time, while output is strong, especially from North America. This should weigh on prices throughout the latter part of this year. It is true that rising tensions in the Middle Eastern regions have put the crude oil market under renewed pressure. In particular, the continued incidents at the border between Syria and Turkey are testing the Atlantic Pact's patience.

Nonetheless, Syrian crude oil exports are null and supplies have not been impacted so far. A full scale military intervention is possible, but is not probable. Turkey knows that any confrontation with Syria could expand into the whole region, and would eventually reduce the oil supplies from Iraq. According to EIA (Energy Information Administration), the Kirkuk-Ceyhan Oil Pipeline accounts for about 0.4 million barrels per day. A long-lasting stop of crude oil from Iraq would cut the world's crude oil supply by more than 40 percent. This is an outcome nobody wants to see. In fact, according to the latest Commitment of Traders report (COT), since June, future funds have massively bought the black gold, while short positions are near historical lows. What is left to buy if most major players are in the market? In addition, crude oil has shown the tendency to be weak during October and November. However, any decline will be temporary. Crude will rise again and the greenback remains overbought against majors. The US dollar index should target 78.00-77.00 over the medium-term.

ECB is ready to buy a large volume of bonds.

The US dollar will remain under pressure until the new Administration tackles the huge debt. Nonetheless, latest data confirms that the US economy is regaining momentum and could perform better in the last quarter of the year. The ISM (Institute for Supply Management) readings showed better than expected numbers in both the manufacturing and the non-manufacturing sectors. Sales of automobiles registered the strongest numbers in almost five years. The real estate market is stabilizing and stocks have held up nicely. As a result, consumer confidence has risen steadily. It is true many companies are not hiring until the so called "fiscal cliff" is resolved. In September, the unemployment rate fell to 7.8 percent from 8.1 percent in August. New jobs rose to 873,000, while initial jobless claims fell by 30,000 to 339,000, the lowest level in more than four years. Is the down cycle in unemployment over? The Labor Department adjusted employment data, which does not take into consideration the self-employed and the agricultural workers, showed a gain of 294,000 in September. According to the study of cycles, the unemployment rate is set to decline between 7.8% and 7.4% before resuming the uptrend for the third and final wave.

The Spanish rating has been downgraded by S&P (Standard and Poor) and is now BBB-. On the S&P scale, the rating of Spain has been cut seven times in one year. It is now only one level above the speculative benchmark, despite Spain being in much better shape than Greece. The new downgrade will probably force Prime Minister Rajoy to submit a formal request for aid to the ECB using the European Stability Mechanism (ECM) fund. In fact, it will be very difficult for Madrid to find private financing. In the coming months, the ECB will start massively buying government bonds from weak nations. This should stabilize the markets, boost the economy in the region and raise inflation in the longer-term. Spain will overcome the crisis. Nonetheless, it is expected to perform poorly in 2013. The level of unemployment, especially for young adults, is at a record high, and confidence is low. The desire for the autonomous regions to play solo is growing.

Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it. I have no business relationship with any company whose stock is mentioned in this article.