From Chris Kimble: Several weeks back, we highlighted why the US Dollar might be due for a rally… and how this could slow the rise in precious metals prices. The greenback was deeply oversold and testing a confluence of price support.
That support can be seen in today’s updated chart as well (see green lines).
Sure enough, the Dollar put together a multi-week bounce that carried it up to the November 2017 highs before stalling out last week. That rally coincided with a pullback in precious metals prices.
Bearish Reversal Pattern?
The November 2017 highs proved to be stiff resistance for the buck – the Dollar literally stopped on a dime and reversed lower. Will this reversal mark another important “turn”?
If the US Dollar creates a short-term peak at point (1), it would send a positive message to precious metals. Stay tuned!
US Dollar “Weekly” Chart
The PowerShares DB US Dollar Index Bullish (UUP) closed at $24.64 on Friday, up $0.01 (+0.04%). Year-to-date, UUP has gained 2.54%, versus a 4.66% rise in the benchmark S&P 500 index during the same period.
This article is brought to you courtesy of Kimble Charting Solutions.