Apparently, fear that Europe will slip into recession based upon Trichet's dogged determination to fight inflation, is causing the Euro to plunge against the USD today. Meanwhile, the markets are showing confidence that the Fed's rate cuts will eventually bear fruit and bring the US out of its doldrums.
The US Dollar Index is up quite sharply the past three days (see the daily chart, on the left side), but particularly against the Euro. The light blue line on the left chart is the 50-day moving average. It has been a very long time since the USD has been above its 50-day MA. However, it is approaching the Upper Bollinger Band, which is usually a point of resistance from a statistical standpoint.
The right chart shown here is a 30 minute chart.
Thursday, February 7, 2008
USD Bouyant Following Trichet Inflation Talk
