Is there an early Christmas gift for the $USD?

kevinmhughes

Over the last several weeks, I have been EXTREMELY bearish on the $USD (Us Dollar).  Our economy was in limbo, or no one knew exactly what to think of it.  On Friday December 4th, unemployment numbers came out and they were better than expected.  Not only did the $USD rally off it’s miserable lows, the stock market also rallied (or closed positive).  Today the retail sales numbers came out and they were nearly double what was expected…  Yet another positive sign.  So the dollar so far today has rallied to highs against the $EUR that we haven’t seen in quite some time.  Now, I am still a little skeptical on some of these numbers because I do believe it’s in direct correlation to the holiday season. i.e.  jobless claims were better b/c seasonal employment (college kids) & retail sales higher than expected because its Christmas, no parent or grandparent are going to let their kids experience a Christmas with no presents under the tree.  Regardless of how I view the numbers, my charts are showing positive signs for the $USD.

I am currently short the $GBPUSD pair (I sold British Pounds & bought the US Dollar) and I believe it will test the support level (green line on the $GBPUSD chart) before Christmas. Once it hits that level that will become a crucial point as to where the $USD will end the year.  Also, the other chart is the $EURUSD and I am in a short position looking for a decline in the $EUR vs. the $USD.

EURUSD dailyGBPUSD daily

I do see strength in the $USD over the next week.  Which is going to put pressure on the $EURUSD & $GBPUSD.  I also believe there will be added pressure to the European nations with the deadline of Dubai World December 14th payment of $3.9b.  We’ll see about that though.


The information in this blog post represents my own opinions and does not contain a recommendation for any particular security or investment. I or my affiliates may hold positions or other interests in securities mentioned in the Blog, please see my Disclaimer page for my full disclaimer.

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