US Dollar Correction Over? Big Test Underway!

The U.S. Dollar Index has been mired in a correction for several months. During that time, stocks, gold, and oil exploded higher in 2017 and early 2018.

But the greenback has put together a multi-week rally. Is the correction nearing an end?

Looking at the chart below, you can see that the US Dollar Index has traded in a wide channel since bottoming in 2008 (1). It tested a mid-point trend line early in 2018 (2) and reversed back higher.  It is now testing it’s downtrend resistance line (3).

U.S. Dollar Index Chart – Big Test!

CLICK ON CHART TO ENLARGE

A breakout here would be constructive for Dollar bulls.  And it could set the stage for a test of the upper channel resistance (1). Some consolidation is possible here… bulls definitely would like to see a bull flag pattern develop (or an outright breakout).

However, should the Dollar reverse lower, it could set the stage for a retest of the 2018 lows.

In any event, commodity bulls/bears and asset managers should keep an eye on the Dollar in the weeks ahead!

This post was originally written for See It Markets.com. To see original post CLICK HERE

 

 

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Comments

Let it Go Thu, 05/24/2018 - 23:53 Permalink

Where the dollar is going is one of the most important issues before traders. The world is currently engaged in a massive game of speculation that contains a lot of risks. A massive number of short positions have formed against the dollar which will cause the dollar to strengthen as they unwind. This could lead to a large shift in the value of many currencies.

Currencies are under assault in places where the economy is weak and the issuer is buried in debt from borrowing dollars they can never repay. A global slowdown combined with rising interest rates in the U.S. and the Fed’s QT (quantitative tightening) has resulted in emerging markets beginning to lose their lifeline of inflows. More on what to expect in the article below.

http://Stronger Dollar Is Problem For Global growth.html

CHX13 Fri, 05/25/2018 - 02:34 Permalink

Worthless fiat measured in the conversion into other worthless fiat - colourfully painted squiggles in a rectangle... That's what I see.

Davidduke2000 Fri, 05/25/2018 - 06:24 Permalink

fraud has a limit even when the top fraudster the us government is involved.

central banks printing fake dollars and buying their own bonds and currency will eventually runs out because nobody will use the dangerous fake dollar anymore.

Russia should put the world on edge by attacking saudi arabia's oil facilities and american bases in Syria, this should raise the level of anxiety all over the world and will make both saudi and the us back off sending the us dollar in a downward spiral that could set the world finances to their true values.