The Usd is showing some weakness against the major currencies on the first trading session of 2010, with strength coming from the commodity market, and especially crude oil. For the last three weeks oil was one of the strongest markets, even moving higher as the Usd index rallied to approach the 78.00 zone at the end of December 2009.
On the chart below it is noted that the negative Oil/Usd correlation was in place from June 2009 until the middle of December 2009, when oil became bullish after hitting the $68 region and then traded in the same direction than Usd index. That period followed the reaction to the global market absorbing macroeconomic data that showed the U.S. labor markets may have stabilized in regard to job losses.
Over the past few trading sessions the correlation has come back to normal, which is short Usd and long oil. Oil is threatening the $81.95 highs from 2009, where a breakout will put new targets in play.
The Elliott wave Team at TheLFB.com will look for a Usd up-trend continuation, but only once oil finds the top, as part of the long-term Usd outlook for 2010.
If you want to know in what area oil may hit the top (Weekly, Daily and 4 hour wave counts) then join us now.
Follow Elliott Wave charts and updates on twitter.
Disclosure: no positions