Dollar
When we take a look at the US Dollar Index ($USD), we can see that it is still in an overall upward trend as seen in the graph below. The dollar continues to strengthen. On any given day, there will be weakness that can occur. This is normal as you look at how the dollar has progressed over the last 4 ½ months. The 9 and 18 exponential moving averages are still heading upward. The ADX trend line is strong and approaching very strong if it were to climb above 40.
Temporary weakness is showing in the RSI and Stochastic indicators. When looking at longer term predictions however, we need to consider the trend of the indicators more than what the indicator is showing right now. We don’t have enough of a downward trend on the indicators at this point.
Until we see otherwise, we look at any weakness as temporary. These can provide future trade opportunities based on the overall strengthening dollar. There are 2 potential high impact reports this week on Friday to keep an eye on. One is Retail Sales for October. The other is Consumer Sentiment Index for November. The consensus on both of these reports is for improved numbers.
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