Just thought I'd post some of my analysis in the dollar's action on Friday. A lot of indicators are pointing to a possible short-term break in the dollar's downward move. If you look at the UUP (Dollar Fund) you will see how it shot straight up and bounced onto resistance or the Ichimoku cloud. The inverse is also apparent in the UDN (Short Dollar Fund) where it is sitting on support 50 SMA after bouncing off the Ichimoku cloud. I will be interested to see how the markets handle a stronger dollar. If the dollar should continue rallying will the markets decouple and trade higher alongside the dollar? Or will the current pattern hold inverse to the dollar which would mean we have some darker days ahead of us and we've hit a short-term top. I now have 200 shares of the UDN buying all the way down on Friday. I have a tight stop at $23.2 to release 3/4 of my position should the dollar confirm the change.
UUP:
UDN:
As for the Yen. If the dollar trend continues I would expect to see the Yen begin to move up and through the Ichimoku cloud which could confirm a bottom and a new trend. I am still holding half my YCS position but had to cash out after buying right at the bottom $18.85 and sold half at $20.30 on Friday.
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