Be advised that all my comments are my OPINION and that OPINION is based on my long term in-house model that I dubbed LAWG 647. The prices I use in my model are week ending prices, usually Friday.BTW, trading commodities is risky and not meant for those that faint at the sight of blood.
October 21, 2020
THE TREND IN THE DOLLAR INDEX VERSUS THE CANADIAN DOLLAR
Down and dirty! According to the LAWG 647 Model on Friday, October 16 the December Dollar Index changed trends to bullish. It will take a close at or below 93.11 on Friday the 23rd to reverse the trend to bearish. It is presently trading at 92.69 and that tells me we are in battle ground central.
December Dollar Index remains in RED ALERT STATUS, which warns me that increased volatility may be in the offing. Both the Positive and Negative Indicators are within the First Standard Deviation of the long term average. The critical values in coming weeks that could reverse the trend to bearish are below:
Oct. 23 at or below 93.110
Oct. 30 at or below 93.270
Nov. 6 at or below 92.389
What does the Canadian $ tell us? It is my opinion that these two currencies the Dollar Index and Canadian Dollar work counter to each other. If the Dollar Index goes higher the Canadian Dollar will work lower and vice versa.
The December Canadian Dollar remains in an uptrend. It will take a close this Friday at or below .74645 to turn bearish it is presently trading at .7623. Both the Positive and Negative Indicators are within the First Standard Deviation of the long term average. The critical values in coming weeks that could reverse the trend to bearish are below:
Oct. 23 at or below .74645
Oct. 30 at or below .75320
Nov. 6 at or below .76375
My Conclusion: Examining the critical numbers of both currencies gives me pause as to the actual strength of the Dollar Index bullish trend. I am more inclined to wait for levels to buy the Canadian than getting long the Dollar Index.
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Lee Gaus is a founding partner of EFG Group founded in 1992 which specializes in servicing Introducing Brokers. Prior to founding EFG Group Lee Gaus, Tom Fritz and Steve Erdman all began their Commodity Futures careers with ADM. Collectively Lee, Tom and Steve have over one hundred years of experience in the industry.
International Futures Group (IFG) founded in 1994 is a sister company to EFG Group specializes in serving institutions, professional traders and individual investors.
We believe our experience and the development of the Model provide our clients, Introducing Brokers and individual clients a unique perspective. If commodity trading is what you do drop me a line at[email protected]or give me a call at 312-384-1166, or 1-877-304-1369. We will be glad you called and are confident so will you.