Normally I like to post a bunch of links to the top stories before the market opens, but I don’t have time to do that this morning. I just want to quickly show you that the US dollar index is already starting to fall towards support as you can see from this chart of the UUP ETF, which tracks it.
The US dollar index actually had its biggest one month drop in July in terms of percent in decades. That led it to come into August with an extreme oversold condition as you can see with the RSI indicator. In a bull market that would lead to a big rally, but with currencies that are in a bear market instead all you get is a very weak bounce and then drifting action that works off the oversold conditions. The US dollar index is already trading down near support and is likely to begin a new leg down before the end of the year.
I talked about that and the general markets with Jim Goddard of www.howestreet.com in this interview.