U.S. Dollar Trying to Flex It’s Muscle vs. the Euro

After a couple years of gloom, the U.S. Dollar is setting up for a nice rally.

And this could spell trouble for the Euro.

The buck stops here!  As the reserve currency, the U.S. Dollar wields some power in the currency market. And a strengthening dollar will likely put more pressure on the Euro.

We can see this already occurring in today’s chart 2-pack.

On the left, we can see the U.S. Dollar breaking out of a bullish declining wedge pattern (1). This should lead to more upside.

Meanwhile, the Euro kissed the underside of a “broken” wedge pattern – resistance at (2). The Euro was rejected swiftly… will this lead to more downside?  As I wrote about last week, this is deja vu for the Euro!

U.S. Dollar vs Euro Chart

It’s also worth noting that the U.S. Dollar rally started from a cluster of trend line support. That area should provide a floor for the buck over the near term.

And if King Dollar really flexes its muscle, the Euro may retest its near-term lows (November 2017) and possibly its intermediate term lows (December 2016).  Worth keeping an eye on for traders and asset managers alike!

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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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