US Dollar clings to a higher low within its downtrend
Here is the daily chart’s story. USD (DXY) needs to hold above the February low of 89.68 in order to keep any semblance of the 2021 uptrend in play. Since the larger trend (SMA 200) is down, the downward pressure is on.
Should USD hold this area (of little visual support), then all bets off on the risk ‘on’ markets. At least the reflation-sensitive, anti-USD markets/sectors. Should USD continue breaking down, the next support area in the mid-88s comes into play. The could keep the reflation trades firm for a while yet.
I am going to lean toward Uncle Buck finding support at or around that level because for other reasons I’ve been projecting May-July as a topping window for macro markets, for a healthy correction at least. But whether or not there is an interim market correction the major support level of 83 could come into play later as stocks and commodities make a final blow off later in the year or in early 2022.
Just spitballing a plan by one indicator, dear old Uncle Buck. There are lots of other market indicators that need to be synthesized into the mix in a routine, ongoing way.
As a side note, the daily chart’s precarious higher low is will prove not nearly as important on the big picture as the monthly chart’s higher low (to the 2018 low). That is where the massive anti-USD trades will either play out or be foiled.
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