Who is the fairest of them all?

Let's  be honest, it's more a case of the ugly sisters when we're talking  about the Euro and the Dollar.  Which of the two ugly sisters would you  prefer?  Now that's what I call a dilemma.

Dollar Index futures;


Given  the recent travails the dollar seems to have faired reasonably.  The  debt ceiling farce was pure theatre.  The US politicians are not stupid,  although sometimes it seems that way.  I got an over-riding feeling  that under the surface, there was a test of international resolve  here.   How far can we push?  How can we find out what people really  think of the US dollar and US treasuries, when it comes to the  crunch?  Well there is no better way than to turn the debt ceiling into a  political football.

Still, on a longer term chart you could argue the dollar is building a base here;




And how about the ugly sister?;


The  first word that came to mind here is - Precarious.  If I could still  trade through ThinkorSwim right now I would be minded to buy some FXE  puts here.


How has this ugly sister aged?;




US dollar sentiment;


Sentiment made a low of 10 at the start of May.

The Euro is a failed project, sooner or later the market is going to price accordingly.


30 year treasuries recently soared up to 140, almost reaching the rarified heights of December 2008;



On a 10 year chart it could almost be a double top;





The 30 year topped on 18th December 2008 at 141'28.   That was the day after USD/JPY made a multi-month interim low;



And the Dollar Index?



The Dollar rallied from 78.775 to 89.97 from 18th December 2008 to 9th March 2009.

Maybe we should be watching the 30 year.