Chris Kimble asks the perennial “chicken or egg” question about the dollar and commodities and focuses his attention on the former.

Chris comments: The dollar has declined almost 10% in the past 60 days without much of a pause.

This Dollar decline/Euro rally has been a positive for stocks and commodities, for example Freeport-McMoRan (FCX) for Copper and Base Metals (DBB).

This decline has drawn the Dollar to two key price points: (1) its 50% retracement level and (2) a support/resistance zone in the 80-82 area that has led to reversals several times over the past decade.

With the Dollar declining without much of a pause and these key price points, odds favor a pause/bounce in the Dollar fairly soon.

Should the Dollar break below (1) and (2), the so-called “risk trade” money flowing to stocks and commodities would pick up momentum.

For feedback or more information, email Chris at [email protected].