Tuesday, May 10, 2016

Dollar Chart Is Bearish

The daily dollar chart is bearish.  

1.) The 50 and 200-day EMAs are moving lower.  
2.) The 50 day EMA is below the 200-day EMA.  The shorter EMA will pull the longer EMA lower.
3.) Prices sold off 6 times since December 2015.
4.) Prices have been in a "lower low, lower high" pattern since December 2015.

The weekly chart is also bearish:

Prices are right at long-term technical support around the 93 level.  There is plenty of technical real estate between 93 and the previous ~85.

     There is no current reason to think the dollar will meaningfully rally.  Instead, expect technical counter-rallies.  And Friday's employment report placed the Fed on the sidelines for at least the next meeting.