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CURRENCY ANALYSIS

US DOLLAR LONG-TERM TECHNICAL OUTLOOK

The US Dollar peaked way back in 2001 / 2002 and underwent a major decline to reach extreme lows in 2008 & 2011, interrupted by a year-long recovery which turned down from its 120 month (10 year) moving average in early 2009.  Since reaching the mid 2011 extreme low, which represented an average decline against nine other majors of around 43%, the US Dollar has so far retraced a tad over 50% of the 9 year decline, finding resistance very close to the 2009 recovery peak.  A setback is now under way with MACD turning down from overbought.  However, the (green) 60 month (5 year) and (blue) 120 month (10 year) moving averages are close to giving a (bullish) golden cross, suggesting losses since the start of the year are corrective.  Potentially this latest retreat could extend to retest support-turned-resistance from 2004 / 2010 (8-12% below current levels), but a key higher low may then form, setting up the start of a renewed recovery phase.

USD CURRENCY INDEX (VS MAJORS) MONTHLY LINE CHART

currency analysis long term USD

Steve Jarvis