The U.S. Dollar Index remains the most important chart in the markets at this time. When the dollar declines the market indexes inflate. The opposite is true when the U.S. Dollar rallies the stock markets deflate. This week the U.S. Dollar Index dropped sharply by 1.94 to close the week at $85.56. In the currency world a decline of this magnitude is a lot of meat and potatoes. Just notice the two week rally in the major stock indexes coincides with the sharp two week decline in the dollar. The U.S. Dollar Index will have weekly support around the 85.00 area and more around the 83.00 area.
Traders and investors that want to trade the U.S. Dollar index to the long side can use the PowerShares DB US Dollar Index Bullish (NYSE:UUP). For the traders and investors that would like to trade the dollar to the downside or short the currency can use the PowerShares DB US Dollar Index Bearish (NYSE:UDN).
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