With all of the excitement over the pre-market action this morning, the US Dollar Index is flat so far. Stocks are making big moves, but the Dollar seems to be digesting last week’s breakout. After basing for about 4 months and breaking the downtrend line going back to last summer’s highs, the Dollar Index is up to the highest levels since March.
I would not be surprised to see the Dollar roll over (I’ve seen it happen too many times). But if it can hold on to last week’s gains, you’re looking at the next target just above $79 where we run into support levels from late last year and resistance from February. $81 after that if this is indeed a major move. The Big picture in the dollar has not changed and I think the major trend is still lower (been going down for 10 years). But we could potentially see a cyclical rally in the opposite direction as money flows to the Dollar as a safe haven.
I’m watching $76 to be on the safe side. If the dollar breaks below that, I think new lows will be made.
$UUP $DX_F $USDX