How far dollar can collapse?
Dollar index is falling rapidly. Yen and euro are rising. The analytics and the charts point to serious problem for dollar now as US economy sends weak signals from housing, auto, and manufacturing and also the retail sectors. The net inflow of capital in US is under pressure. That is the main reason for dollars fall. If the dollar declines too much, it will impact the long term bond rates. The higher long rates will finally stabilize the dollar. The million dollar question is how far can dollar fall? Dollar actually is getting ready for a long-term bull market. The drops and testing of lows at the end of bear markets are severe. That is exactly what can happen now. Dollar has good support at 80 in Dollar index. It should definitely hold 78. However, as dollar is falling but getting ready for a new bull market, smart money is accumulating dollar. That is the reason dollar can stop falling any time start its journey towards 120 in dollar index.
