Dollar Rebound?

With most observers either negative or very negative on the U.S. Dollar, we wonder whether a counter-trend rally in the greenback might be in the offing. The long-term trend remains down, but a descending wedge formation (a technical configuration which usually resolves to the up side) is forcing us to consider what could happen next for the buck.

The WSJ notes this morning that one source of pressure on the dollar is US investors penchant for overseas bourses: "As U.S. investors chase profits overseas, there may be an unintended
consequence closer to home: pressure on the American dollar."

20070520_overseas

After the Bank of Japan left rates unchanged last week, the yen fell versus the dollar (Japan’s 0.50% rates are the lowest in the world). Some traders have suggested the euro has topped out for now, due to technicals and position-trimming."

Carl Swenlin’s chart below shows a short term buy signal. Note that the price index has broken above the its short-term declining trend line.

Cww20070519c1

Swenlin notes: "Bottom Line: Let there be no doubt, the trend is down in both the medium- and long-term (our trend model is still bearish on the dollar), and it is too early to assume that a change in trend is taking place; however, there are plenty of reasons to begin nursing some positive expectations."

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Sources:

DOLLAR TRYING TO TURN UP

Carl Swenlin
DecisionPoint, May 20, 2007
http://www.decisionpoint.com/

U.S. Investors’ Overseas Bets Dent Greenback
Quest for Stronger Gains Leads to Weaker Dollar; A Self-Fulfilling Cycle
JOANNA SLATER
WSJ, May 21, 2007
http://online.wsj.com/article/SB117969793758608877.html

Dollar Looks Set to Move Up
DAN MOLINSKI
WSJ, May 21, 2007
http://online.wsj.com/article/SB117970632855709045.html

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Friday Night Jazz: Metheny Mehldau

MethmehlPat Metheny is one of those guitarists that was always interesting, but he never really floated my boat. His style is kinda New Age-y, a bit too cold/technique focused for my preferences. I can see why some people say he is an acquired taste.

However, a friend in the music industry (with meticulous taste) had recommended his latest album with pianist Brad Mehldau (Metheny Mehldau Quartet) to me, and on his suggestion, I gave it a whirl. 

It is a delightful surprise.

It is an eclectic disc, ranging from a mix of jazz fusion, acoustic, Celtic, pop, Asian-tinged (41 string guitars!) to Brazilian music. Somehow, this odd and always changing mix seems to work on nearly every track.

This is the second pairing of Metheny and Mehldau colloboration, the first being Metheny/Mehldau.
The pairing works well. Mehldau brings a degree of warmth and intimacy
often missing from more traditional Metheny recordings.   

Metheny frequently returns to his earlier electric jazz guitar style, but it seems to work so much better in this quarter than any previous work I’ve heard from him. Its worth checking out.

~~~

For those interested in how this pairing came about, there is a two part interview with Metheny and Mehldau after the jump . . .

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