Can USD weaken endlessly?

[Dr.S.Sivaraman]

It appears in the market that USD can weaken endlessly.Can it be possible?
Still all currencies are trading against USD.In the international market, predominantly Dollar denominated bills are in practice for exports and imports.ECB and BOE are trying their level best to curb the appreciation of their respective currencies because they afftect their exports.The commodity currencies are also squeezing the respective country exporters.Who is doing all the one sided moves of firming other majors?
The operators based in US and having their counterparts in other countries are trying to trap every trader and business people by depreciating USD.What they gain? when all small traders feel that the high is seen in EURO and GBP and take short positions for even swing trades get stoppedout because of the one sided move.Traders are afraid to take long positions at the highest levels because sensible people will not aim for such trades.But the operators squeeze every level positions holders.If we take long and wait for further rise they drop and hit the stops and then rise.If we take short and wait they rise and hit our stops and then drop.What is means.Operators are making wide range swings and hitting stops of traders either way and off loading their long positions in other majors.They are holding the markets high and inducing the traders to accept the new levels.
But the operators cannot hold the market high for ever as they also need to book profit in their positions.Their distress act will commence once they have build up their short positions at the highest levels.Then they will allow the market to slide irrespective of the data releases and then buy against their sells after distress drop.They will book profit this time in a big way to make the reversal in multi year trend reversal time.Operators create the market sentiments and act against the traders.Time will explain this to us.
Regards
Dr.Sivaraman

[Mike W]

I don't know if this is a conspiracy theory or not but I do know that the greenback is and has been losing value. The reason? America! We are so far in debt and have that mentality that we can just go further that it compounds and the prices in currency shows it. The times, they are a' changin. The markets aren't acting irrationally in my opinion, but instead just going through a changing period. If you will look back to your historic charts, you'll see that there was a time when the dollar fell to the pound for a good while. People probably said the same thing back then and it's only happening again. In true answer to your question of can the dollar depreciate endlessly, the answer is no. I don't think that is possible as there will always be investors in it and those investors will see the lows as prime time for buying opportunities. After this happens, we'll just go through the rounds again. What are your thoughts?

[Dr.S.Sivaraman]

The forex market can have only usd strengthening and usd weakening moves alternatively to attract traders and to trap them.In this process the next cycle will be USD gaining moves.market sentiments continue to change,market perception continue to change,market participants continue to change- but the market continue to give surprises to traders and also big players due to the 'X'- Factor.
Regards
Dr.Sivaraman

[Mike W]

Dr. Sivaraman, could you expand on your thoughts of this X factor? I am intrigued by your thoughts on this. When the usd strengthens and weakens alternatively, it just creates a range in my opinion. Ranges are tradable just as trends are. I think the trap you are speaking of is when the currency pair moves out of the range instead of staying within the perimeter of it. This is where simple breakout trading techniques become useful. I do agree that a good deal of traders lose money through ranges, but there is still a possibility to make a solid income while pairs are in range. Once it breaks out, instead of moving back through the range again, just close out you previous position and open one in the opposite direction. This breakout strategy will enable you to make money, where most lose money- in the range.

If you are talking about trending markets, then yes your correct on this as well (usd strengthening and weakening moves alternatively). When you talk of this, are you taking about retracements throughout a trend? Thank you for your input.

[Dr.S.Sivaraman]

Those who have been watching various markets and their volatility understand that beyond human element there is extraneous factor which is governing the market moves.

Normally the range is set and traders identify the buy and sell areas or the support and resistence and do swing trades.But there is another important element namely 'shift in trading zone'.The shift can be upside or downside.Besides market is a place where in collective responses are expressed.The sentments play an important role.The decision making process of the trades and acceptance of trend change in the market come late after the market moves.This is because of the emotional perception of the market.

The traders are influenced by the 'X'-Factor namely the Electro-magnetic impulses coming from the out space has phase effect on the decision making process and emotion expressions of the traders.This results in greed,panic and surpises for the traders unexpectedly.As long as the quick market moves trigger the emotional status of the traders,the markets continue to give suprises to traders and operators.

The big players or operators also cannot act against Nature.They will also get the surpise and evaporation of their manipulating power and become distress when the world suddenly come in grip of panic creating events (like 9/11).Then the big players holding huge open positions fearlessly will become panic and off load and offload looking for buyers at any levels.Hence the markets normally take longer duration to gain levels,but in a brief time lose all the gains - if you see the historic charts during yearly trend reversals times ,you can understand this market action..So even the operators have the limitations in their actions and they cannot take away all the money from the traders.

The past records show that the market operators accumulate money like any thing beyond their imaginations and lose quickly and come back to their original status or lower than the original.That is the influence of 'X' -factor.

Operators may come and go but the markets will go on for ever when traders have the interest in speculations and earning quick money.
Regards
Dr.Sivaraman