- The US dollar initially tried to rally a bit during the course of the trading session only to drop towards the 0.84 level.
- The 0.84 level has been important multiple times, and I think at this juncture you have to look at this through the prism of a market that is perhaps trying to find its footing because it is oversold on just about any metric I can think of.
- Because of this, the chart is worth watching from what I can tell.
While the Fed Reserve is likely to cut rates, the reality is they aren't necessarily going to catch the US dollar on fire. So, I think there's probably only a matter of time before we start to see value hunters come back in and pick this up. If there is any hint whatsoever that the US dollar is going to bounce, this is one of the first places I'll be looking because we are oversold like I said with the MACD showing quite a bit of negativity and at this point we have the relative strength index in an oversold condition as well. With this if we can turn around and break above the 0.85 level, I think this is a market that has a good shot at bouncing probably 200 pips. If we can break above the 0.8750 level, then the US dollar truly will take off.
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Both of These are Safety Currencies
Keep in mind that the Swiss franc is a safety currency, but then again, so is the US dollar. And if we are about to see the economic situation in the globe slow down and perhaps stagnate, it's very possible we may see demand for US dollars pick up. So, this is a place I'm watching very closely. When you zoom out to the monthly charts and the weekly charts, you can just see how overdone this is. Value hunters are out there, and they're watching.
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