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Dollar Index - 5th January



I had expected the retest of the tops of the Dollar index, but the bias was definitely bearish. The index crashed equally fast, and surprising, just like when it shot from 71 levels.

Though it is too early to say anything or even worth putting your neck in line, the general move that we have seen in the month of December could be part of a bigger move on the downside for the dollar. For anybody following real economics, not the television-massmedia economics, it is a sacrilege that dollar can still retain any of its value. The event of Federal debts shooting from roughly 900million to almost 3trillions has had no impact on the currency markets. If you were to look at it, the markets have shaken off the event like a lint.

There were many things going in favor of the dollar like repatriations, redemptions, safe-havenness, foreign-aid, rush for US bills etc that helped dollar. It is hard to fathom these forces will be able to stop the downside on the dollar for long.

I do not have a short term call (based on daily charts) excpet to somthing no brainer like, index may retrace upto 84 levels. Would be watching the charts though.
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