Buy USD

It appears that we have a buy on the USD.  We recently broke support around 75.5 and reversed (violently) to the upside.  Next resistance is at 79.5.  If we break that look for 82.   Since US Dollar weakness is inversely correlated with Gold and Equity weakness, look for reversals in those rallies.

Dollar Bull Market

It is amazing to me that so many people continue to ignore the obvious. That is the present, ongoing bull market in the US Dollar. Yes, that is the US Dollar that you and I use every day. It may be the worst of many paper currencies or it may be that dollars are becoming more valuable as deflation takes home. But as the accompanying chart shows, the USD bottomed back in 2008. Yet, in the last two years most observers have been in denial of the fact. While the USD may be overbought in the short term and vulnerable to a pullback, look for any such weakness to be transitory. The monthly chart bodes well for US Dollar bulls like me.

Dollar Bull, Pound Bear

What a difference a month makes. Bulls have had their horns shaved a bit. And the bears have gotten a little more ferocious. Everyone is sighing with relief as the crisis has passed. Thank goodness for the ECB !!! Hip Hip Hooray! Hip Hip Hooray! But wait...

What if it isn't over? How could that be? Surely the most powerful men and women of the most advanced countries in the world must be in control? It couldn't be possible that events are spinning faster and faster out of control of the strongest wills and brightest minds that the world has to offer... Ummm, could it?

Take a look at this:Or, for a slightly longer term view, this:


By the way, the Euro charts are very similar. And they both have given back ALMOST ALL of their gains today! The ECB monetary floozies pledge 1T Euros to "do whatever it takes" to hold the Euro together and the Euro and Pound barely budge! That is a vote of confidence!!! Ha! Now the British Pound MUST hold here. Notice that it is sitting on a level that has been touched three times. If this level of 1.48 against the USD does not hold, we could see it 20% lower in a matter of days. Right now, I would give this a 65% chance of happening. Those with exposure to the British Pound need to be careful. The odds are that the European currency crisis is not over.