Uncle Buck, Daily & Monthly Charts…

The rally from the lows of a year ago was an impulsive move up and then a labored series of higher highs and an as yet unconfirmed higher low (black arrow). The daily trend is up as both the SMAs are pointing that way. But with the recent wobbling within the Fed and positive trade noises (recall that the trade war played at least a marginal role in firming the buck) we see a bounce from just above the SMA 200 to clear short-term resistance at the SMA 50… and a new pullback.

I had originally allowed for the last down leg to stab through the SMA 200 but the decline aborted and Uncle Buck bounced. It’s in an interesting spot here, sandwiched between the 50 & 200, needing to make a new high or violate the last low in order to confirm or negate its rally.

us dollar

The monthly chart shows that USD confirmed a cyclical bull market in early 2011 as it made a higher low when silver, commodities and Treasury yields blew out at the climax of that inflation hysteria (enter the announcement of big brain Bernanke’s Operation Twist, which was all too successful in painting inflation signals right out of the picture).

The 2018 rally came from valid long-term support. MACD and RSI are actually okay here, but AROON has not yet flipped to an uptrend. As the foil to so many ‘inflation trades’ a lot of global assets could rally if USD decides to re-test long-term support. But it is at a shelf of support here and now, roughly coinciding with the daily SMA 200 above.

us dollar

So I’d say keep an eye on Uncle Buck.

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