USD is one of the central themes around which global stocks, commodities and some US sectors will pivot. It is still playing the ‘above support and below resistance’ game on a daily chart. It is at 95.07 in pre-market as it deals with the SMA 50. The oscillators have flattened out and ADX (14) shows directional momentum flattened out to a similar state to the spring, which preceded a big move. These consolidations can drag on and all we can do is deal with them. It’s going to break one way or the other at some point.
If USD breaks upward, it could revive the other rider against the macro as the 2 Horsemen (USD & Gold/Silver ratio) bring destruction…
…or USD could decline and bring global relief and relief to US sectors that benefit from a weak currency.
Sidetrack behind us, let’s check out the weekly chart. What had potential as a bullish Inverted H&S put in a false breakout instead of a dip to form a right side shoulder. What’s more, the price has formed something of a dome. MACD is positive but rolling over (triggered down) and RSI is not stellar either. The larger trend is up still up.
USD monthly established a downtrend in 2017 but has been reacting against it in 2018. The reaction came from valid long-term support as noted. MACD is sub-zero but triggered up and RSI is positive. ADX shows the momentum from the 2014 surge completely washed out but DI+ has ticked above DI- on the 2018 rally.
Bottom Line
The water torture continues on the daily chart. When the consolidation finally breaks we’ll have a gauge on the next intermediate game plan where asset markets are concerned. Near-term direction is very questionable but long-term USD still appears to have begun a bull market in 2008. The Dollar Collapse crowd will not think so, but the monthly chart does.
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