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The US Dollar Index had a slightly negative session on Friday, and more importantly formed a shooting star at the 83 handle. This suggests to us that the next move will be down, but we see a ton of support at 82. With this being said, we think that the downside for the US dollar is somewhat limited at this point in time, although the Federal Reserve is widely anticipated to be easing its monetary policy in September.
The biggest problem with the idea of selling the US dollar overall is that the other central banks around the world are all in a race to the bottom as well. The Bank of Japan is easing, the European Central Bank is about to start easing again, and although they won't admit it, the Bank of England will more than likely be forced to ease as well. Because of this, we are somewhat hesitant to sell the US dollar overall. However, a break below the 81.50 level would in fact be very bearish and have us doing exactly that.