Friday, August 1, 2008

Forex Fridays -- the Dollar

Is the bottoming continuing? On the weekly chart, notice the dollar has been in a decline for the last two years. Prices have continually moved lower, breaking through technical support and then consolidating those losses before moving lower still.

However, over the last 4-5 months, the dollar has moved sideways. While it hasn't rallied, it also hasn't moved lower -- and there has been plenty of reason for it to do so. I've seen several analysts on TV suggesting the long-term bear market is over and that it is time to buy dollars.

On the daily chart, notice there is a slight upward tilt to the last few months of price action. While this isn't a strong rally, it's also not a bear market situation either. However, also note that prices and SMAs are in an extremely jumbled position. They are close together, and have been that way for the last three months. In order for this to turn into a bullish chart the SMA picture has to become clearer.