In the last two days the Dollar appears to be forming a bottom. You can see in the attached chart how its rapid decline has paused, and it even spiked above the upper trendline of its descent. Overnight it has fallen back inside, and it still may get to DX76 before bouncing. Currently it is right above DX77.
EWTrends adds to this a discussion of the circled technical indicators, which appear to have reversed.
Sentiment is more bearish than at any time in history (at least since the Dollar was finally severed from gold in 1971).
The downward momentum stalled late last week when the Euro hit $1.40. The AUD is hovering around 98c and flirting with parity, hitting 99.2c so far.
The most crisp analysis comes from Credit Suisse, which predicts a 100% chance of a rally from here based on net speculative positions. They believe QE2 has been fully priced into the USD “and then some.”
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