Sunil Sharma's  Instablog

Sunil Sharma
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I am an independent trader and technical analyst. I have been following the forex and equity markets for over 15 years. I am a discretionary trader. My investment philosophy includes a blend of fundamental and technical analysis. Prior to taking up full time trading, I was an entrepreneurial... More
My company:
Cerebral Works, Inc,
My blog:
Market Remarks
  • Dollar Is Falling And Euro Is Bouncing – Is Fed Responsible For This? 0 comments
    Sep 13, 2012 8:18 AM | about stocks: FXE, UUP

    Dollar index has been falling ever since it made a 15 year high of 121.29 in July 2001. Subsequently, it made an all-time low of 71.05 in April, 2008 - a 41% decline from the high. In between, it bounced off around 80, which acted as a support zone in earlier years too - in '91, '92 and '95. After making the all-time low, dollar has traded within a symmetrical triangle on monthly timeframe, crisscrossing the 80-level. The center line from the projected apex of the triangle is within this zone. Dollar index is again fallen within this zone.

    After facing resistance around 83.63 - the high made on August 23, 2010 - dollar index made a double top in May-July 2012. It broke below the neck line of the double top in late August and is now on its way to the measured target of 78.75.

    On the other hand, EUR/USD has had a terrible time in the first few months of 2012. However, on monthly timeframe it is maintaining a long term up trend. Note: prior to 2000, EUR/USD is constructed as a composite of euro's various national currencies.

    On weekly timeframe, EUR/USD is marching towards the downtrend line, which touches the May-2011 and the August-2011 highs, after making a Trend Channel Line Overshoot (TCLOS) chart formation and overcoming couple of strong resistance levels. Now, another resistance level is approaching - near 1.2975.

    Click here to

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

    Stocks: FXE, UUP
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