Trending the USD Index

The Jobs data last Friday was a significant disappointment to most of the surveyed analyst who called for a better numbers report. But in spite of that, the USDX as a measure for a basket of Foreign Currencies have managed to go higher closest to our target objective of 88.80 since our market view report for several weeks and ended the week of the 4th of June at the 88.26 The current price level as of this writing for the 7th of June registered a high of 88.55 in the American session.

Still dominating the market is still the Euro Zones sovereign debt crisis which is really nothing new, however what added was Hungary's inability to address their own respective debt obligation that also carried a relative relation with France's probability of being in the same boat. With all these negative sentiments hoovering above the USD ability to sustain its current levels that even on the technical perspective the promising outlook for the dollar is still very much intact.

As described with the corresponding chart, the relative HI-LO configuration of the USDX has more momentum to attain what we have already anticipated for sometime now. The increase in volumes and open interest has fueled the market and reinforced its trend. We would rather not speculate as to when a possible reversal nor a price change would occur. Not that we have been bias but the trending trades has been in line with the strength of the USD as a flight to quality investment alternative as to the European currencies deteriorating value.

Gold's price corrections lower has only be in line with the relationship of the Euros weakness rather than USD strength that also played a significant role to the cash investment flow of investors that saw the weakness of the stock market's closing lower for the week. The possibility of the Dow Jones to continue to move lower is greater than the last period where it would have to retrace its low price levels from the 900 Pt's. drop although, in a slower fashion as computer triggered orders during those times would have to be even-out for the least. There is no certainty as to this approach as it is more speculative in nature. Although, history does repeat itself as the market also tends to follow its wave pattern but this time on a technical perspective may create a falling wedge in the near term perspective. As of now the configuration would not be seen as it is still in the making. Although, the probability that we may also be wrong as newer fundamentals would disrupt this scenario whenever a new money flow will be back in the stock whenever the USD make is corrective movement. On the daily basis the negative divergence on the top side of the USD and the diagonal line lower relative to the RSI and percentage rate shows a corrective move on a technical basis is expected. But price adjustments lower will just check the overbought and resume its price levels higher on a later day.

We would be monitoring the volumes, open interest after the expiration of the June USDX, money flow, the average directional index and the investors / traders commitments on their positions that shows the actual sentiments of their trades. This is it for now and more to follow within the week's trading sessions as they develop.

Best to your trades and stay on top of the market!