Smoking Securities

Half Baked High Finance

All Eyes On The Dollar ($UUP)

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UUP090727The USD has fallen over 10% since March, stirring up inflationistas and fueling the bull market. Since the beginning of May, the dollar has traded in a downtrend below a descending lower Bollinger band, forming a descending triple bottom on July 20th.

While it seems unlikely that the Federal Reserve will raise interest rates due to 9.5% unemployment, a dollar crisis could change the tone of Fed policy. Whether helicopter Ben has the cajones to raise the risk free rate remains to be seen, the political will for such a measure seems unlikely given the present administration.

With a current bearish price objective of 22.36 based the width of the triple bottom, there is no apparent reason to be long UUP unless it can recapture 24.24.


Written by chucklesamadeus

July 27, 2009 at 10:41 pm

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