The volatility of the major currencies against one another since the
inception of floating exchange rates in the 1970s continues to amaze
me. My long held suspicion is that the dealers run 'em up and down
over time to turn a nice profit and cover all the overhead.
At any rate, the USD has been on a tear lately at the expense of most
of the other majors and the Euro in particular. You are no doubt well
briefed on the problems the EU is having as well as the changeover in
PM status in Japan which might favor a weaker Yen.
The USD is now overbought 0n 40 day RSI, and is getting extended
against its current uptrend. It is also overbought against its 50 day
m/a. It stands at important 18 - 20 month resistance as well. Thus,
the game of chasing the dollar up has reached an important testing
point. Should the nervousness about the EU persist, and should
Japan start talking the Yen down, the next critical resistance
level for the dollar is at $USD 92 -- a level which runs back to 2005.
$USD chart.
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