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Wednesday, 19 September 2012

USD Index: 19 September 2012, Wednesday, 10.07pm Singapore Time

USD Index: 19 September 2012, Wednesday, 10.07pm Singapore Time

The chart above shows USD Index breaking down the BLUE Support line which most technical analysts around the world sees. They are all bearish of the USD given the surface news (QE3) and shorted USD on news, especially when it is really convincing that USD is bearish with all the money printing. But is it really so?

If US prints, who says the basket of associated currencies cannot outdo US? Japan is already the first to outdo and outlast. Secondly, as mentioned in my previous articles that the final nail for Europe is coming, this means USD may be unexpectedly in high demand. Many opposing forces at work here certainly.

The problem with shorting on such convincing news is that the USD already broke down the BLUE Support 1 month ago in August 2012, and is at the Support area following the news. What does this mean? It may mean a massacre of the majority of market participants who view QE3 as bullish to financial markets and USD as bearish (including the high profile Daryl Guppy etc). Is it really the case? This had already been absorbed 1 month ago. The 5% insiders are always ahead and now doing opposite of the 95% who depend on news to be on the wrong side.

As of now, the financial markets have still not confirmed USD change of trend. USD remains in the over-looked RED Channel above. Furthermore, USD is now at a very important point indicated by the GREEN CIRCLE above, an intersection of TRIPLE strong supports. Only a breakdown below the triple strong supports will confirm a USD Bear. Otherwise, USD remains bullish and financial markets remain bearish.

At the triple major support, since many high profile analysts and majority of market participants are bearish on USD due to QE3, majority have shorted USD, and are bearish of it; because of this, there is a high probability of US Dollar rebounding from the current point (GREEN CIRCLE above), and carry on its up-trend.

It takes a lot of guts to be a contrarian of the market currently.

Note: 
USD Supported means Financial Markets Resisted.
USD Bullish ==> Financial Markets Bearish

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