Is The US Dollar About To Reach A Melting Point?

us dollar crash lower breakdown long term support investing chart

It’s been 20 years since the last major peak in the US Dollar. Could the greenback’s latest turn lower confirm another peak?

Today’s chart takes a macro view of the US Dollar Index and highlights the long-term down-trend at each point (1). As you can see, the buck is on a topsy turvy ride, bouncing up and down within this down-trend.

The latest bottom formed after the financial crisis and has seen the US Dollar trade within a 9 year up-trend channel marked by each (2). This gave bulls some confidence that the US Dollar may have formed a long-term bottom… Not so fast!

The broader down-trend may be exerting its force here. The US Dollar Index has formed a potential double top pattern right at its 61.8% Fibonacci resistance (as well as down-trend line resistance) – see point (3).

This bearish formation includes a recent move lower that is attempting to break a confluence of support at (4), including lateral and up-trend support lines.

The buck could melt a good deal lower if this support gives way. Stay tuned!

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Any opinions expressed herein are solely those of the author, and do not in any way represent the views or opinions of any other person or entity.

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