From the Desk of Ian Culley @IanCulley
The US dollar Index $DXY is running into support at a shelf of former highs.
How it reacts will influence how stocks fare heading into the year-end.
Let’s check out three charts and three levels to monitor.
Expert technical analysis of financial markets by JC Parets
by Ian Culley
From the Desk of Ian Culley @IanCulley
The US dollar Index $DXY is running into support at a shelf of former highs.
How it reacts will influence how stocks fare heading into the year-end.
Let’s check out three charts and three levels to monitor.
by Ian Culley
From the Desk of Ian Culley @IanCulley
The 2020 V-shaped recovery has warped investors’ brains.
But this is nothing more than recency bias. In reality, bottoms are a process, not an event.
Don’t fall victim to what’s easy or comfortable. Instead, let’s focus on the facts.
Markets continue to send mixed signals, testing the resolve of even the most disciplined investor. Rather than fight the trend or trendless nature of the markets, I prefer to identify evidence that supports the next directional move.
And there’s one insightful chart atop my deck regarding the direction of the US dollar.
by Ian Culley
From the Desk of Ian Culley @IanCulley
It’s time to short the USD.
Based on the weight of the evidence, our bias for the US dollar has flipped bearish.
Our first shot at betting on a weaker dollar was successful, as the EUR/USD hit its target earlier in the month. That’s encouraging!
But it’s important to note most dollar pairs are running into logical levels of support or resistance.
Many of these charts are messy at best.
Except the Mexican peso.
In fact, no currency has stood its ground during the dollar’s parabolic advance like MXN.
by Ian Culley
From the Desk of Ian Culley @IanCulley
The dollar experienced significant volatility last week, posting its largest single-day loss since 2015.
As far as we’re concerned, the dollar is done. The weight of the evidence strongly suggests its best days are behind it. But that doesn’t mean it’s straight down from here for the US Dollar Index $DXY.
Instead, we expect plenty more volatility in the coming weeks and months. And when we look beneath the surface of the DXY, we’re at a logical level for the dollar to catch a breather.
by Ian Culley
From the Desk of Ian Culley @IanCulley
For weeks, I’ve been itching to call a top in the US Dollar Index $DXY.
Sentiment, volatility, and momentum thrusts have all suggested an end to the US dollar wrecking ball. But price hasn’t indicated any significant weakness in the structural trend.
The absence of confirming price action has made it impossible to take a bearish USD stance.
But that’s finally starting to change!
by Ian Culley
From the Desk of Ian Culley @IanCulley
The US dollar has stopped going up!
In fact, it’s already registered a slightly lower high and lower low this past month.
But we can’t call a top in the US dollar yet. While it came close to officially triggering a top last week, the lack of follow-through kept us in our seats.
With fresh monthly candles in the books, let’s review longer-term charts and reiterate key levels for ol’ King Dollar.
by Ian Culley
From the Desk of Ian Culley @IanCulley
The dollar is dropping!
It’s finally time to bet on some sustained downside action, and the euro is my vehicle of choice.
I laid out the conditions that would flip my outlook on the euro earlier this month. Three weeks later, the pieces have fallen into place for a bullish position.
Let’s take a look.
by Ian Culley
From the Desk of Ian Culley @IanCulley
I don’t care what your favorite TikTok financial guru says: Trading isn’t easy.
The market has made this point again and again this year.
The market has also driven home another essential truth: Trends persist.
I talk about this approach quite a bit because I’m a trend-follower. It’s my favorite Dow Theory Tenet, and it’s the foundation of my approach to the markets.
Trend-following might sound simple. But it’s far from effortless. Like any worthwhile philosophy, real-world applications can sometimes be a struggle.
In fact, no other market has tested my trend-following resolve quite like this year’s unstoppable dollar. And I’m still looking for opportunities to get long…