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).
See chart below.
U.S. Dollar Index Chart – Big Test!
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!
Note that KimbleCharting is offering a 30 day Free trial to See It Market readers. Just send me an email to email@example.com for details to get set up.
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.