From the Desk of Ian Culley @IanCulley

“Buy stocks if the US Dollar Index $DXY trades below 105!”

Simple and straightforward. That was our roadmap back in early March.

Now, almost three months later, the dollar is putting that strategy to the test as it approaches 105 from below.

That multi-month consolidation with “continuation pattern” written all over it never continued lower.

Instead, the dollar index has chopped sideways within a tight range for almost six months. And the evidence is beginning to support a possible upside resolution…

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From the Desk of Ian Culley @IanCulley

Here we go again… 

The USD/JPY is breaking out.

I can’t think of a stronger trend than the dollar-yen last year. It absolutely ripped to the point we were joking everything priced in yen looked good – even gold!

But it wasn’t the only market trending higher at the time. The US dollar and interest rates also rallied together.

Today’s USD/JPY strength raises a painful question for many investors…

Will interest rates and the US Dollar Index $DXY follow?

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From the Desk of Ian Culley @IanCulley

Dollar bulls hold the line.

The US Dollar Index $DXY is clinging to the 100 level, refusing to let go despite new 52-week highs for the British pound and a steady rise in the euro.

I’ve laid out numerous ways to play the dollar in recent months and what will confirm a DXY breakdown. None of that has changed.

But one chart caught my eye.

I was struck over the weekend by the resemblance between the commercial position in gold and DXY.

Check it out…

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From the Desk of Ian Culley @IanCulley

“The bigger the base, the higher in space.”

That’s how I learned it from JC.

But he wasn’t the technician who coined the adage. It was actually handed down from Lousie Yamada, who studied under the legendary Alan Shaw.

It was amazing to connect with technicians from around the world last week at the 50th Annual CMTA Symposium.

I have a great deal of gratitude for all those who made last week possible and to the founding members who paved the way for technical analysis. 

The experience was humbling, as it exposed my roots and reminded me where I come from.

It’s just like the Swiss franc reminds us that observations from more than a hundred years ago continue to play out across today’s markets…

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From the Desk of Ian Culley @IanCulley

“Rates, the US dollar, crude oil, and the S&P 500… repeat!”

These charts swirl atop every investor’s mind as markets await the upcoming rate hike decision.

Meanwhile, it’s messy!

The S&P 500 challenges the upper bounds of a multi-month range. The US dollar and interest rates chop sideways. And crude oil remains resilient despite increased selling pressure.

But not all markets are trapped in a trading range right now. In fact, there’s one forex cross breaking down, suggesting lower yields and cheaper crude oil…

It’s the nokkie-stocky, the Norwegian krone and the Swedish krone!

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From the Desk of Ian Culley @IanCulley

A weaker dollar remains a key ingredient for a risk-on rally. Yet, like interest rates, the buck refuses to roll over.

The US Dollar Index $DXY continues to hover well below last year’s peak, holding within a tight range for the past four months.

Today, we’ll review critical levels for DXY as this trendless action defines the chart.

We’ll also look beneath the surface for signs of broad strength or weakness and revisit a binding intermarket relationship for clues regarding the dollar’s next major move.

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