Intraday Dollar Reversal Dampens Bulls Spirits

Published on Wednesday, 11 November 2009 12:54 Written by Christopher Lynn

New York, Nov 11 (TradersHuddle.com) - The US Dollar Index (.DXY) reversed after dipping below the 75 level in the early trading session. The inverse correlation between the market and the greenback is evident as the S&P 500 reversed after breaking resistance above 1,100 making this a failed breakout.

The inverse correlation between the market and the US Dollar continues with a factor very close to 1 at 0.958, and as long as the trend in the Dollar continues to go lower most likely the market will continue to reach new highs.

Also the marquee currency pair of EUR/USD broke strongly above 1.50, to then rollover back below 1.50.

Commodity and energy stocks rolled over as the green back moved higher, so stocks like Freeport-McMoran Copper & Gold Incorporated (NASDAQ: FCX) has been weak since the move in the currency markets.