The US dollar is back in rally mode

The much anticipated taper has sent the dollar soaring. John C Burford examines the charts to see if the rally has further to go.

When the Fed decided to gradually taper its bond-buying programme on Wednesday, stock markets took it as a green flag to race even further ahead. But it was the reaction of the less-reported US dollar that took my eye.

Incidentally, the overwhelming stance of the pundits towards the Fed's taper news was super-bullish. Here is a selection of instant reactions from seekingalpha.com on Thursday: "Fed drops the green flag and bulls are off to the races", "Putting 2014 in perspective", "Lo, a market e'er booming", "Taper refreshes bullish outlook", "A taper to new highs", "Don't fight the Fed".

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John is is a British-born lapsed PhD physicist, who previously worked for Nasa on the Mars exploration team. He is a former commodity trading advisor with the US Commodities Futures Trading Commission, and worked in a boutique futures house in California in the 1980s.

 

He was a partner in one of the first futures newsletter advisory services, based in Washington DC, specialising in pork bellies and currencies. John is primarily a chart-reading trader, having cut his trading teeth in the days before PCs.

 

As well as his work in the financial world, he has launched, run and sold several 'real' businesses producing 'real' products.