The Falling U.S. Dollar ... Is it a Good or Bad Event?

By: Marty Chenard | Wed, Apr 27, 2011
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A dropping Dollar is considered an advantage for U.S. firms that trade internationally.

But, could a falling Dollar turn into a U.S. confidence crisis?

The answer is Yes. While a falling Dollar is good for U.S. exports, there is a point where a good thing could turn ugly.

Take a quick look at today's Dollar chart and you will see where that point is.

Where we are now ...

Note that the Dollar is now below its 74.21 support level ... and there are no more supports until it gets down to 71.31. So now, the Dollar should continue to fall and that will be good for our stock market and for exports.

However, as the Dollar starts to approach the 71.31 level, glee will turn to worry as investors start to wonder if the Dollar and can make a double bottom (at 71.31) ... or if it will plunge below that support and go into free fall.

It is very hard for anyone to imagine the Dollar not holding that double bottom, but if Congress doesn't wake up soon, stop trying to satisfy lobbyist, and start making decisions for its citizens and economy, then the Dollar will judge them harshly.

US Dollar Index



Marty Chenard

Author: Marty Chenard

Marty Chenard
Asheville, NC 28805
Tel: 828-296-1200

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