I believe that the next level down may be found in UUP = $22.00. While the market may have factored in the Fed's QE expectation, there remain some significant opaque details as to the extent of the easing.
Of late, Feds purchased large quants of its treasuries, thus flooding the forex market with $USD. Other countries at the antipod of the greenback have thus seen their currencies rally to levels that may offset the coming export data (look at Japan getting hurt with its stronger Yen vs. China's Yuan benefiting the most among exporting countries).
In the same token, the US is likely to benefit the most of out a weaker dollar, as this is likely to spur the demand for goods and services that are slowly gaining a competitive ground against the competition in Asia.
So, I expect that while the technical factors are discounting the fundamental development with Feds and domestic data, I believe that a support at UUP's $22.00 offers a rather flagrant target, IMHO.
- Dalcindo
-------------------------------- Message in reply to: one ingredient to help this oil rally is so low $USD, it drops again today! how low can dollar go?!!! --------------------------------
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