On Monday, I noted that the euro had broken out of a key weekly channel. Today, I wanted to focus on the dollar, where the exact opposite is happening:
Starting last September, the dollar has benefited from a safe haven bid in the market. It's not that traders actually like the dollar; it's more that they dislike it the least. However, with the appearances that the euro is starting to settle into a true solution to their problem and with the Fed looking more and more likely to engage in QEIII, traders are selling off the dollar.
On the weekly chart, prices have moved through the upward sloping trend line started last September and are now at the lower Bollinger Band. Momentum is negative and prices are weakening.
There is a silver lining to this scenario. A cheaper dollar is better for US exports, which helps at a time when US manufacturing is slowing.