US Dollar Index at a Major Crossroad

October 17th, 2012

by Dominic Cimino

Advisor Perspectives welcomes guest contributions. The views presented here do not necessarily represent those of Advisor Perspectives.

The chart below confirms the major crossroad that the US Dollar is at. The potentially bullish inverted head-and-shoulders bottom pattern on the US Dollar Index chart has been negated, as evidenced by the market's failure at the neckline (e.g. shown in green). The bullish trend-channel pattern, depicted in red, has likewise been negated. However, the most significant potentially bullish pattern is still in play. In May of this year, the long term bearish trend-line (e.g. shown in blue), was violated to the upside. The market has since retraced to the trend-line, where it currently rests, thereby confirming the importance of this trend-line during this current period of heightened uncertainty in regard to global currency policies.

I believe the next move in relation to this trend-line will confirm the Dollar's fate for the next several years. Currencies tend to trend in years, versus months or weeks. On a final note, my experience does suggest that the two failed bullish patterns do tilt the probability toward an additional failure of the blue trend-line breakout. But a confirmation of this speculation is not yet at hand. Watch the blue line. I'll keep you updated.

Dominic Cimino

Registered Representative, Securities offered through Cambridge Investment Research, Inc., a Broker/Dealer, Member FINRA/SIPC. Investment Advisor Representative, Cambridge Investment Research Advisors, Inc., a Registered Investment Advisor. Preferred planning concepts, LLC & Cambridge are not affiliated.

© 2012, Dominic Cimino of Preferred Planning Concepts, LLC (You can explore the services offered by Preferred Planning Concepts by viewing us on our website at Any redistribution, reprinting, or reference to this chart or content is allowed so long as reference to the author and source is acknowledged.

Important Disclosures

Please be aware that this is not a recommendation to purchase or sell any security. This is not a recommendation for any individual or institution to alter their portfolio holdings. Every individual or institution has its own risk tolerance and investment objectives and perspectives.

Any above opinions of the author should be viewed as such. These opinions in no way represent any type of guarantee. Realize that if you choose to invest in securities, investing in securities carries with it uncertainty and the risk of loss of principal. Lost investment opportunity is also a possibility. Investing in securities carries no guarantees.

Past performance is no guarantee of future results. The price movements within capital markets cannot be guaranteed and always remain uncertain. The above opinions are meant to stimulate thought and should be viewed as such. You are encouraged to discuss these views with your representatives if you have any questions or concerns.

Any indices mentioned are unmanaged and cannot be invested in directly.

It must here be mentioned that technical analysis offers no guarantees of future price movements. Technical analysis represents an observation of past performance and trend, and past performance and trend are no guarantee of future performance, price or trend. The price movements within capital markets cannot be guaranteed and always remain uncertain.

Neither Cambridge Investment Research nor Preferred Planning Concepts is responsible for the accuracy of content provided by third parties. All material presented herein is believed to be reliable but we cannot attest to its accuracy.

All charts presented were made available by eSignal, a charting service available to individuals or professionals. Anyone interested in exploring the potentials of eSignal should give us a call.

Website by the Boston Web Company