Wesley Chapel, Florida, April 28, 2008  -- The value of the U.S. dollar has been one of the hottest market topics lately. As you have probably noticed in media reports, the debate is whether the slide in the dollar’s value will continue or whether the sinking dollar has finally bottomed and will recover some of its losses of the last few years.

The repercussions of what the dollar might do are significant for a wide range of markets, not just for the currencies or the financial markets but also for many commodities. Crude oil futures prices are knocking on the door of $120 per barrel, for example, but the price of gold as a ratio to the price of oil is at one its lowest levels, making gold “cheap” even at its current price. Prices of grains, soybeans, copper and many other commodities have soared to offset declines in the dollar. Consequently, traders in nearly every market have a stake in the dollar’s future. To learn more about this visit www.TradingEducation.com.

One school of thought is that the dollar has to weaken significantly with U.S. short-term interest rates at relatively low rates to other currencies, with the excessive amount of money that is being “created” out of thin air and put into the marketplace in the form of credit guarantees and other monetary infusions to alleviate a credit crisis and with huge piles of loans and debts still to be resolved. The only way out of the current debt/credit mess is via inflation and a weaker dollar, according to this argument.

"On the other hand, the U.S. dollar is a key world currency on which much of today’s global economy is based. The world can’t afford to let the value of the dollar collapse, and the central bankers will figure out some means to manipulate their way out of trouble, this view suggests," said Darrell Jobman, Editor-in-Chief for www.TradingEducation.com.

No one can be sure how this whole scenario will play out in the longer run, but VantagePoint Intermarket Analysis Software charts suggests at least a short-term respite in dollar weakness and projects a bounce higher that could make long positions pay off.

The charts look at the dollar from two perspectives. The first one shows the U.S. dollar/Swiss franc pair, just one of 20 pairs that can be analyzed with the software. The first circle shows the predicted medium-term moving average (blue line) turning down before the actual medium-term moving average (black line) and then making a downside crossover that indicated a short position ahead of the month-long downtrend.

After a choppy sideways period, the predicted medium-term moving average made another crossover, this time to the upside, indicating the turn to a long position. In addition, the predicted short-term and long-term differences (green and red lines in lower panel) have turned sharply upward and the Predicted Neural Index (gray line in lower panel) is at 1.00, all indicating a market that is on the rise, at least for the short term.

Looking at the dollar from another angle, the VantagePoint chart for euro futures shows that the euro is a mirror image of the dollar. A predicted medium-term moving average (blue line) crossover to the upside suggested a long position in the euro in mid-February and, using traditional technical analysis, a possible breakout add-on situation (dashed line). That situation changed late last week as the predicted medium-term moving average crossed below the actual medium-term moving average (circled area). In addition, the predicted short-term and long-term differences in the lower panel (green and red lines) have turned sharply lower, and the Predicted Neural Index reading is at 0.00, all indicating downtrends.

Will the U.S. dollar/Swiss franc uptrend and euro futures downtrend last? That remains to be seen, but the trend the active short-term trader is looking at now is higher for the dollar relative to the Swiss franc (and other major currencies) and lower for euro futures.

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Established in September 2005, TradingEducation.com, LLC (www.TradingEducation.com) has developed into a comprehensive internet resource offering traders free educational materials, quotes, and market relevant news for stocks, exchange-traded funds, commodities, currencies, futures and options. Traders from all experience levels can benefit from the wealth of information and tools available at TradingEducation.com which seeks to enhance their trading strategies and avoid costly mistakes. All information on TradingEducation.com, LLC websites is free to the public, with operational initiatives supported solely by advertisers.

About Market Technologies, LLC
Headquartered in Tampa Bay since its founding in 1979 by Louis B. Mendelsohn, with trading software customers in over 90 countries worldwide, Market Technologies is a fast growing, Inc. 500, company and recognized world leader in market forecasting. Market Technologies researches and develops proprietary trend forecasting and market timing technologies that utilize artificial intelligence applied to intermarket and hurricaneomic analysis, in order to forecast various commodity and financial markets throughout the world. These presently include, but are not limited to, stocks, stock indexes, ETFs, energies, interest rates, currencies, metals, grains, meats, softs and Forex, covering over 600 world markets. (www.tradertech.com)

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