U.S. Dollar index, EURUSD and Commodities Playing Together
Currencies / Forex Trading May 15, 2009 - 11:22 AM GMTProblems are on the both sides of the ocean but technical picture is giving us some new info about potential break of longterm trendline. When we put it in context of breaking the longterm trendline on dollar index, we can see building bearish setup for US dollar. First the EURUSD technical picture.
Double Bottom technical patttern, then flag consolidation with following break of longterm trendline. We are now full week above this trendline and for the time being there is buying interest on dips back to the broken trendline. After Double Bottom formation, there was also created higher low, so another sign of bottoming process.
And here you can see the US dollar index daily chart where is now clear that we have broken longterm rising trendline, we can see double top and then creation of lower low. Another factor supporting this bearish trend is the break of bearish flag pattern and the technical potential of this formation is painted in yellow.
When this setup turns out to be true, then the EURUSD is headed about 10 figures higher and this could lead to the major push in all U.S. dollar denominated commodities. I like gold, silver, natural gas.
Michal Matovcik
www.absolutideas.com
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