Pretty much what we stated has come to pass. The dollar rallied strongly and traded well past 8100. It is within striking distance of putting in a new 52 week high. The weekly trend is still positive, so after a bit of consolidation (not necessary but it would be good), the dollar should be in a position to test the 83.50-84.00 ranges and eventually (unless the trend changes) rally all the way to and past 85.50 .Market Update August 26, 2014
The dollar has hit our suggested targets in a rather short period of time. Again this goes to show that logic is not the right tool for the markets. Given the massive debt we have and the rate at which we are printing new dollars, the USD should be sinking, instead it is trading at new highs.
The dollar broke out quite strongly. On the very short term time frames it is overbought, and such a strong move usually is followed with a test of the former resistance zone now turned into support; this zone falls in the 81.80-82.00 ranges. It is also likely to run into resistance as it tests the former uptrend line in the 84.50-84.70 ranges.
The Euro is also extremely oversold as it has taken a serious beating so some sort of relief rally is to be expected before it resumes its downward trend. The weak Euro is a clear indication that the silly sanctions the EU is implementing against Russia at the behest of the USA are going to cause them more pain than the Russians.
The Euro’s plunge indicates how dangerous and short sighted many of the governments were to initiate sanctions against Russia. We are not taking sides here, but the noise the western media is making is simply nonsense. Had warmonger peanut brain McCain and a few other brain dead individuals from the EU not visited and encouraged the individuals in Maidan to revolt, there would have been no war today. There is a “disconnect“ between the actions of the European governments and what the public seeks, the public is not so keen to engage Russia. We are already seeing cracks in this coalition. Europe will abandon America a lot faster than most expect. Russia has a powerful weapon and that is gas. It can bring Europe to its knees by just cutting the gas supply. The next few months will bring about some very interesting and shocking revelations. Stay tuned.
The dollar should continue to soar to new highs and this outlook will remain in effect until the trend changes. This outlook will remain in effect, until the trend turns negative.