US Dollar Trade 08/23/2009 Update

Here's a US Dollar trade update 08/23/2009 after last weeks post on a potential bullish move and ways to use stocks and ETF's to take advantage.

Last week I posted a page on a possible US Dollar Trade with Bullish potential. What happened so far is that I made the post last Sunday, the US Dollar moved higher last Monday morning, and that was it. It has been declining ever since.

I'm sure many of you have had similar situations occur to you. I can tell you that is was frustrating, to say the least, but, that's a common occurence when trading.

Many times we will be whipsawed back and forth and put on an emotional rollercoaster. That's why it's important to have guidelines in place to determine your entry triggers and exit triggers before you enter all trades. This will keep you from having to make last minute decisions while you are on that roller coaster.

Here is an updated chart of the U.S. Dollar Index. I've circled and underlined a few levels to take a look at.

US Dollar Trade

After last Sunday's post, the US Dollar Index moved higher through Monday to about $79.50 and then declined the rest of the week. You can see on the chart as it met up with it's 50 Day Moving Average, it quickly reversed.

You'll notice a red support level on the chart at the recent low near $77.40. This will be the key level that will have to hold if a low is indeed in place already. If this level is breached significantly, the $76.00 level may act as a magnet to draw prices lower as it is the next lower low from the past as shown on the chart back in September 2008.

The price will have to begin rising early this coming week to keep a Bullish stance here.

Next is an updated chart of GLD. Similar movement here as above, only in reverse. GLD moved lower intitially on this past Monday, and then moved higher the rest of the week.

Thursday and Friday appeared to be some market manipulation in my view. As the Dollar and commodities rose on Thursday, GLD stayed below $92.50 displaying a clear resistance. Then on Friday, it spiked higher to "catch up" with other correlated markets.

Anyway, here is the chart:

GLD Chart

In addition to last weeks upper downward sloping resistane line, I've added a lower upward sloping support line. Both of these combined are displaying a Symmetrical Triangle. Both of these levels should be watched for any potential breakouts, either to the upside, or the downside out of this pattern.

Next we have an updated chart of DZZ. Since this tracks Double Short Gold closely, the same Symmetrical Triangle pattern is being displayed, only prices are inverse to the chart above.

DZZ Chart

The Green circles with arrows from last week are being shown again. DZZ opened higher last Monday just as in the previous green circles displayed, but then declined the rest of the week, differentiating itself from the previous pattern I've shown.

Just as above, the Symmetrical Triangle support and resistance levels should be watched for a potential breakout either way.

Lastly, an updated chart of UUP. Nothing different here. If the US Dollar continues its decline this coming week, UUP will decline also. If the US Dollar can find support and begin a move higher, UUP will also move higher.

UUP Chart

Here's the next U.S. Dollar Trade Update 12-02-2009 I posted in the blog section.

As always, do your own research, use good Money Management and cut those losses short!

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