Friday, May 28, 2010

Is the US dollar doing a double top?


Most of the Analysts I read consider the US dollar in a bear market. However, the dollar moved from 74 to 86 from December to now and then is making a small formation that looks like a small double top. The double top is a sign of a loss of strength of the underlying issue being traded and the formation is confirmed when/if the second peak breaks below the trough between the two peaks. In this case, it would be a break below 85. Double tops are notoriously unreliable for prediction.
Longer term, the dollar may be setting up for an even bigger double top (see the second graph), where the confirmation point is 74.


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