Despite the Dollar Index (DX) correcting

by Admin

Market Commentary

Despite the Dollar Index (DX) correcting, melt down was witnessed in most of the asset classes. Strange correlation is observed between the Dollar Index and the benchmark equity index of Dow Industrials Average (DJIA) wherein direct correlation is observed since past few days as against inverse correlation observed between both DX and DJIA. The US Dollar Index (DX) may trade sideways with medium term to long term resistances are seen 83.40 and 84.20 though the trend is still intact till it manages to hang on above 81.80 ranges. Direct correlation.

Dow Industrials (DJIA) is trading consistently beyond all time high of 14200-14300, historic high made during October 2007 indicating new rally is under progress but the momentum has run out of gas at 14400 ranges; only monthly close below 13700 would force us to rethink the bull trend.

Historic correlation between DX Vs DJIA suggests the long-term trend is still Dollar bearish till the Dollar Index is not closing above 84.50 on monthly basis though the short term and medium term trends are bullish.

Sideways-Up 1.2910 1.2860 1.2830 1.2780
Sideways-Down 94.30 93.70 92.50 92.10*
Sideways 1.5230 1.5170 1.5100 1.5050
Sideways-Down 0.9530 0.9470 0.9410 0.9350
Sideways-Down 120.30 120.00 118.90 117.80*
Sideways-Down 1.0510 1.0470 1.0430 1.0380