Is the US Dollar Nearing Bottom? Or Is It Different This Time?

us dollar index currency decline lower weakness chart august year 2020

US Dollar Index “weekly” Currency Chart

The U.S. Dollar ran into a perfect storm in 2020: a pandemic (Coronavirus), an easy Federal Reserve, and trillions of dollars in government stimulus.

The result has been a steep decline in the greenback.

Looking at today’s chart, however, suggests that the US Dollar may be nearing a bottom. That is, if recent history proves true.

The Dollar is testing its 9 year bullish up-trend support at (1) and US Dollar bulls are disappearing. In fact, investors are the least bullish the US Dollars (20% bulls) since 2011 at (2). Notice that each time the Dollar tested support with few Dollar bulls, it rallied higher.

Time for a rally? Or will this time be different?

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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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