The US Dollar index futures briefly struck a new all-time low just minutes ago, before bouncing back within its recent trading range. The tick chart above shows the brief breakdown above.This is tremendously significant, because while a new low against the Euro means that the Dollar has sunk against just one currency, the collapse of the Dollar Index represents a collapse against a basket of currencies, which is something more fundamental in nature. This may be the beginning of the next round of US Dollar selling, and even higher commodity prices and inflation.
The second chart shows the daily price of the US Dollar Index futures. Even though it has been relatively stable for the past month, there is still a definite sinking sentiment, and prices continued to close mostly below both the 20-period simple moving average and the exponential moving average. Today's collapse may be the beginning of a new bear market for the Dollar, or perhaps the blow-out bottom needed for a sustained rally. We should see a break-out, either higher or lower, very soon! From a probability standpoint, however, the charts seem to favor a break-out lower.
