DELIBERATE INSTABILITY OF THE US DOLLAR?

Twitter It!

Ideally, most governments attempt to control their currency’s value from rising or dropping too fast by manipulating interest rates or buying and selling back their own currency; these interventions create a greater demand when rates are higher than competing currencies and when supplies are tight. When it comes to the US Dollar, part of the reason that its value has dropped more than 30% against the Euro is due to the enormous national debt as well as an intentional strategy to devalue the greenback to make US goods cheaper overseas and to finance the wars. China’s peg of its Yuan to the US Dollar (the Yuan is composed mainly of the US Dollar, followed by the Euro, the Yen and the Korean Won) has also been a sour note for the

US who has a much more difficult time competing with Chinese goods and the colossal trade gap.As expected, the Fed today left rates unchanged for obvious reasons; as I stated in the past the Fed is in a quandary: on the one hand, raising interest rates would be the sensible and hard decision to make (boosting confidence in the US Dollar) while leaving rates alone will help the housing market by giving it time to recover and stabilize. I believe that the US Dollar will retrace higher after the recent sell-off to support at 80.00. I am not saying that I am bullish on the greenback but simply that this market is oversold and that after hitting support a few times, it has managed to recover quite well.

Sep DXU7 continuous

 

 

 

Past performance is not indicative of future results.

STRATEGY: Buy Sep US Dollar at 80.35 or better with an initial target of 81.12 followed by 81.78. Place stops at 79.48. If you’re bullish this market, then use a trailing stop after the first target has been reached. Good Trading,

Chad Geraigiri
Optimus Trading Group
1-800-771-6748

YOU SHOULD BE AWARE THAT THERE IS A RISK OF LOSS IN FUTURES TRADING. PAST PERFORMANCE IS NOT INDICATIVE OF FUTURE RESULTS. FUTURES TRADING IS NOT SUITABLE FOR ALL INVESTORS.