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Walking The US Dollar Tightrope

We seem to be walking a "tightrope" with the US Dollar.  On the one hand, we are taking various actions with hopes to "improve" our economic condition.  But at the same time, these many actions, which include ultra-low interest rates, large-scale deficit spending, and large-scale "money printing" inherently place the US Dollar at significant risk of decline - which would cause significant adverse consequences.

On a January 13 post I wrote a blog post concerning the overall situation of the US Dollar:

http://www.economicgreenfield.com/2010/01/13/the-us-dollar-a-few-comments/

In that post, I wrote that there appeared to be few if any signs that a severe US Dollar decline was impending.

However, the situation has changed.  When viewed from a technical analysis perspective, US Dollar seems vulnerable to a decline when viewed on at least the daily and weekly timeframes.

As the following chart shows, from a long-term monthly perspective the US Dollar seems to have resistance around the 80 level:

chart courtesy of StockCharts.com

On an "all things considered" basis I believe we are now at the point where the US Dollar price should be intensely monitored as it appears highly vulnerable to decline.

disclosure: no positions in the US Dollar


Disclosure: disclosure: no positions in the US Dollar