Technical observations of RossClark@shaw.ca
In the past three decades, once the Dollar became oversold (or conversely the Euro became overbought) the chance of a rebound to the twenty- or fifty-week moving averages increased dramatically. We are there now.
The Dollar produced a weekly downside capitulation alert the week of March 28th. The Euro staged weekly upside exhaustion alerts March 28th through April 11th. Couple this with a weekly sequential sell setup in the Euro as of April 11th and we are in a position to undergo a tradable dollar rally.
An offshoot of such a correction in currencies is a related decline in the gold price and related equities.
CHARTWORKS - APRIL 15, 2008
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