Below a quick update on TMN's case for a counter trend bounce in the Dollar Index. TMN will not discuss all of the arguments made earlier this week in favour of this move again, as they have hardly changed, however there are a couple of new reasons to be (at least) short term bullish on the USD:
1) Benjie Boy's speech on Friday in Boston turned out to be rather cute.
2) The elections on November 2nd will likely reduce Bernanke's wardrobe to either a dress or a skirt. TMN thinks both do go well with a beard. Should Obama's Democrats suffer an election defeat, which TMN believes they will, the significance of the upcoming FED meeting will be limited to say the least.
TMN does not think Bernanke will be stripped of his keyboard but the efficacy of some buttons might be reduced for at least as long as the president is not republican (except Ron Paul).
Despite the DXY dipping one more time since TMN's last comment on this topic, the technical set up has hardly changed. The inverted hammer that we had mid week on this chart turned into a massive doji. The top of this doji is at 77.93, which TMN regards as a trigger level for more upside once tagged.
Click on the chart to enlarge