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With hedge fund manager, CNBC regular and long-time veteran of the Russian markets Tim Seymour at the helm, Emerging Money (http://www.emergingmoney.com) provides education, trading analysis and comprehensive views of emerging markets around the world. As economies in the BRIC group and beyond... More
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  • DXY rally looks like it might hit a wall 0 comments
    Jan 7, 2011 12:40 PM

    Although the dollar is surging thanks to the new tone on the U.S. economy, the technical picture indicates that the gains may be topping out soon.

    DXY is a crowded trade right now, rising on general sentiment but it looks like there are only a few more days — at most — here before the recent thrust takes the dollar index up into some pretty heavy overhead resistance.

    It does look like DXY will ultimately respect the 20-day moving average, which is currently trending at around 80. If anything, right now the DXY’s current level of 80.40 looks a little overbought beyond the short term.

    But in that short term, a reasonable top to look for would be 80.75. It is fairly unlikely that we will see it hop up beyond 81.70 — where the hard 200-day resistance is — in any event.

    We might get real job creation tomorrow to keep the sentiment running high, but unless the big boys truly are unwinding USD/CHF or USD/JPY trades, the dollar may not get much stronger from here. This, in turn, would make it safe to take another look at your commodity and emerging currency trades.

    Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.
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