Here Comes the Dollar’s Next Leg Higher

• Posted by Greg Harmon
• on March 3rd, 2015

Look, up in the sky. Is it a bird? Is it a plane? No its Super Dollar! Able to leap Emerging Market currencies in a single bound, more powerful than the Chinese Yuan locomotive and faster than a speeding Euro. Able to change the course of mighty Yen rivers, bend Aussie Dollars in its bare hands. Yes Super Dollar!

A throw back to my days of watching the black and white television program of Superman. But wow, the superlatives really fit. The US Dollar has been on a tear higher since July. Look at the SMA’s. Almost parallel moves running higher. That is a great trend. Looking at the price action a bit more closely though sees a pause in early January and a consolidation range ever since.

But as the calendar turns to March there are several signs that the strength is about to re-emerge. Take a look at the chart above. The Index moved above the range it has traded in Monday, the first clue. The Bollinger Bands® that had squeezed are now expanding, allowing it to move higher. The RSI is moving back higher and bullish. And the MACD is about to cross up, giving a buy signal.

If the break out higher holds there is some resistance overhead at 99. But looking at the run up from the last major consolidation between 87.50 and 89, the break out would give a target of 100.75. Get ready for an even strong Dollar, because here it comes again.

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