This post is an update to posts of March 17 and January 13.
Here is a chart of the U.S. Dollar on a monthly basis since 1983:
chart courtesy of StockCharts.com
On the aforementioned March 17 and January 13 posts, I spoke of numerous reasons to expect, and fear, a U.S. Dollar decline, both from a fundamental and technical perspective.
Subsequent to the March 17 post, the U.S. Dollar rallied into early June, presumably over various economic problems in Europe.
As seen on the above chart, the level reached by the U.S. Dollar in early June, just above 88, is significant in that it is roughly equivalent to that reached in late ’08 and early ’09. This, along with other technical analysis measures, leads me to believe that the recent U.S. Dollar peak in early June represented some type of technical “top”, and now we are on a decline.
Given our national policies and actions to offset economic weakness, along with the long-term technical perspective of the U.S. Dollar, I continue to believe the U.S. Dollar is highly vulnerable to a substantial decline.
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SPX at 1065.96 as this post is written