Is the Dollar Pulling Itself Up

I am an old school guy so all of my film references pre-date the millennial era. So when I think of something that has been beaten down and is trying to build itself back up my first thought is to the feel good movie of the 1970’s Rocky starring Sylvester Stallone. The image of Rocky pulling himself back up off of the mat and carrying on comes to mind. You can see the pain and damage caused and are not quite sure that he will be able to get back on his feet.

The US Dollar Index looks a lot like this right now. The chart below paints the picture with price action. The long fall from the top at the beginning of 2017 to a pause is September. Rising up in a channel then which turned out to be a bear flag. Then breaking the flag to the downside in December and continuing to the current low. A possible knock out punch.

But then the bounce into early February. Like Rocky trying to pull himself up but falling back to the low again. And as with all movie theatrics a second attempt to get up underway now. Will it end like Rocky, back on his feet and moving toward victory? Or will this second attempt also fail?

Momentum supports a continued move higher. The RSI is now over the mid line and making a higher high, while the MACD is also making a higher high, and rising. A move over the early February top would confirm a double bottom for the US Dollar. That would be the equivalent of Rocky back on his feet but still looking a bit woozy. Continuation from there back over 92.65 would indicate recovery and over the November bear flag high at 95.15 possible strength to move towards a knock out punch.

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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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