Dollar Continues to Build Higher

The latest 6 year cycle for the US Dollar started well before the Trump administration started to play trade hardball. With a break out of a symmetrical triangle in 2014 it rose fast. It topped after two years of moving sideways in a channel at the target move objective over 102.50 and a 61.8% retest of the move lower following the decline from 2002 to 2008, and then reversed. It is the reversal that began after the election.

That move lower continued for a year until finding support at the start of 2018. With 3 months of consolidation, it started to move higher in April. And May has shown strong follow through. The monthly chart below details the consolidation over the 200 month SMA on a retest and then the pop higher. Now it is back in the consolidation zone. What is next?

The chart suggests there is more upside. Broadly, there are still 2 1/2 years left in this cycle higher. But the momentum is turning up as well. The RSI has made a higher high at the mid line and is rising. The MACD has reset and is now curled up for a cross up, a bullish signal. The next confirmation would be a monthly close over the October and November 2017 highs just above 95 to confirm continuation.

 

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The information in this blog post represents my own opinions and does not contain a recommendation for any particular security or investment. I or my affiliates may hold positions or other interests in securities mentioned in the Blog, please see my Disclaimer page for my full disclaimer.

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