USD Graphic Rewind: Dollar Index Gets Pounded as Traders Sell USD at Every Turn
By Jonathan Granby | April 11, 2011 4:06 PM EST
The dollar index took a beating on Friday as the possibility of a US government shutdown over budget talks heaped yet another weight on the already heavily weighed down buck. Despite avoiding a shutdown at the 11th hour the buck has retaken any of its lost ground suggesting than players will look to any excuse to sell the buck ever lower. After breaking through, and closing below, support at 75.00 on Friday this now opens 2009 lows at 74.15 as the next downside target. Which considering the way things have been going will probably be taken out in coming sessions or days.
At present we cant really see a glimmer of light for the USD to reverse this trend as the confluence of events that stand against it are formidable. Particularly with investors shrugging off, or downright ignoring, negative sentiment toward other currencies, especially the euro and its troubles on the EMU periphery. Therefore, we feel that in the near-term the downside looks the more likely direction, with 2009 lows providing the next target.