I was asked by a reader to comment on the US dollar in my last blog entry. So this weeks sector analysis will focus on the dollars’ recent rise.
By the way–please keep the ideas coming for my weekly sector analysis presented every Thursday. I really do appreciate your input.
As you will see on the long termed chart, the dollar remains within its rather huge long term triangular formation that’s been in place since 2009.
The smaller triangle noted on the chart (also noted in prior posts) has broken to the upside. This would imply a target that would get us into the 83 area on that chart, which is the top of the larger triangle.
Now take a look at the shorter termed daily chart. Obviously, with such a rapid rise for the dollar, various momentum studies are screaming overbought.
I’d have to assume at this juncture that the greenback may take a breather pretty soon. But I’d also guess that the dollar will reach its 83 target thereafter
Of note, the Canadian loonie has some significant seasonal strength coming up in April. That might imply an opportunity to take profits on the US dollar before April if you are a Canadian trader. However, from a longer termed perspective, the C$ has broken down out of the symmetrical triangle formation noted on my prior blogs.
I presented a long termed view of the US and CDN dollar(s) last September http://www.valuetrend.ca/?p=1419
and last month http://www.valuetrend.ca/?p=1794