Not to date myself but for all those Charles Barkley fans out recognize that “Sir Charles” was a formidable force and the shortest player at 6’6 to lead the league in rebounds. Serving as inspiration I expect the US dollar to stage a rebound from current trade. The same support levels that held in mid-June I expect to hold around 80.70 in September futures. The first confirmation that an interim bottom has been established in the Greenback would be a settlement above the 20 day MA (light blue line). This would likely be followed shortly thereafter by a trade back to the 38.2% Fib level and 50 day MA that both come in just above 82.25. While I am not calling for a bull market I do see a 2-3% appreciation in the coming weeks.
Though I will not take a long trade with clients in the dollar I will use this analyses aiding with entries and exits in other commodities that appear to be influenced by the dollar movement.
Markets that I feel could be influenced by a 2-3% appreciation in the Dollar:
- Gold, silver and energies move lower.
- Cocoa moves lower.
- Currencies move lower. I like bearish trade in the Pound, Euro and Swissie.
- We get a bounce in the Treasury complex.
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