Is the US dollar in rally mode, or is this latest attempt to rise going to get smacked down yet again? Let’s look at a chart.
The US dollar put in a bearish outside day on Monday — usually a sign it’s going to go lower. But there was no follow-through on Tuesday. Instead, the dollar rallied. Still, the 10-day moving average remains as overhead resistance, as does the high from Monday.
The dollar was due for a correction — a 3-day correction (maybe longer) wouldn’t be surprising. Central banks around the world are trying to prop up the dollar. They could spark a rally for a short time, anyway.
Meanwhile, commodity longs in gold, oil and more have plenty of profits to grab, which is why hard assets went down disproportionately to the dollar’s weak rise on Tuesday, and why gold and oil continued lower berfore the start of the trading day today (Wednesday) even though the dolalr is backing off. Stay tuned.
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