USD Relevant Adjustment with Foreign Currency Rates

In Search of Equilibrium in a Time Line

After confirming a bearish market call on the USD since the start of the 2nd quarter, the registered low @93.88 bp still serves as the initial support for the DXY. Upon doing our due diligence, the outlook for the DXY would be for a wide daily consolidation within its trading range until such time another catalyst emerges in the market. 

DXY Weekly Chart May 13, 2015

There are several surrounding factors that keeps market price swings at current levels. However, these price adjustments are well within our market call and the same due diligence on global exchange rates' equilibrium levels & self-adjusting into these market conditions after a round of rate cuts by major central banks  interest rates. China's two consecutive moves on the RRR and the recent rate cut have been considered by us as a market neutralizer after the RBA did the same beforehand. Where further stimulus are meant to prevent China's economy to deepen from their current situation.

For now, the directional trend for a weaker USD continues until such time it says otherwise. The consolidation may remain in tight ranges while a declining formation would be intact in a technical perspective along side a variable time cycle before the USD pivots back to higher grounds. The assumption would be correlated to the USD rally that took place well within 7 months to achieve a relative high for the USD. 

With that said, to consider a variable time line that the USD would do the same on the flip-side with a specific price level will have to be defined based on this analysis. And on top of this case scenario, is to find the relevant signal where the probable disconnect of the USD outflow of investors from the current market conditions of the Dow Jones as an additional indicator for such occurrences within the time line. In essence, due diligence is a must to come up with a well informed trading decision. More to follow related to this subject matter.

Since in today's global information network is well in place, most sophisticated investors and traders are more self-directed with the information available. What is more important is knowing and be properly guided with the right directive information applicable and meets their trading criteria before any trade execution.