CURRENCIES

The key "news" turning point for the plunging dollar was at 75.6 in early November when the Fed announced "QE 2", the latest in a series of euphemisms for currency depreciation. Actually, this was within our model for an important low for the DX. This includes the Downside Capitulation and the Sequential Buy pattern.

This initial bounce took it to 81.4 and the correction has been to 78.3 this week. With the Forecaster it could go a little lower, but it has had a noteworthy drop in the RSI which is beginning to limit the decline.

When it starts, the next leg up will be very interesting.

The Canadian dollar has been enjoying the buzz and reached the RSI level that stopped the rally at 100.5 in April. The higher high at 101.5 may not be the top, but the RSI is starting to exert some gravity

(Continued on next post)