US DOLLAR DECLINE: EXPECTED AND ON TIME
THE US DOLLAR DECLINE WAS EXPECTED
So few today consult the history of events, but, many occurrences (and, especially in the markets) have a repetitive nature to their actions.
Even in currencies, there is a theme that repeats often enough to be useful for our investment decisions and plans.
Take the US DOLLAR for example.
There’s a tendency over the last 30 years for the dollar to make tops around June.
There’s an example of a Seasonal US DOLLAR chart to the left.
If we now move over to a conventional candlestick chart for the dollar we’ll see that this year (2013), the highs came in a little early (in May) but close enough to identify that this year is a ‘normal’ year pattern all told.
It’s important to look at the seasonal expectations for the time following the expected highs going forward into the Fall.
Chart History indicates that we can normally expect declines of 1%-2% towards the end of the year but at present price levels our decline expectations could be as high as 6%.
Of course, these aren’t ordinary times, so, this market must be closely monitored to check for adherence to the normal pattern.
You’ll see clearly on the second price chart where the tops (green bar price area) and the lows (red bar price area) have been occurring.
This is crucial information.
Next, we’d like to have a sound idea of what price area this market will break and go back down to the lows. In other words, where to expect the fastest declines to take place.
WHERE WILL THE DOLLAR BREAK?
The last time the US Dollar was breaking down was last Summer right in line with the Seasonal expectations.
Using the Excalibur Method as a guide, the point shown by the small red rectangle was the calculated point of weakness indicating that greater declines could be expected with high probability.
The decline took place as predicted by the analysis.
Today, as of this writing, we have a new break point calculation just above 82 on the index chart shown. Price has already begun a decline approaching this price break point so, stay alert to this possibility.
An accelerated weakness in the US Dollar combined with already existing weakness in other currencies could lead to great volatility in the currencies ahead. – George