CLICK ON CHART TO ENLARGE
Dollar broke above falling resistance this past week, that has been in place for over a year. For any product/asset, the ideal situation is a breakout, then a decline that tests the old resistance as support.
If a rally in the Dollar is to take place, this is an ideal price point for it to do so, because it is testing the old resistance as support at (1) today. This is a great price point to long the Dollar with a stop a couple of percent below support.
bond yields are on support, broad market is up against resistance and the dollar has formed this pattern all at the same time. Preserve capital is my guess
Zurich has a 2 year old Double Top, a clue to Euro troubles?
Aaron…history would suggest if the Dollar does rally, the first goal would be lower commodity exposure for sure. Dollar post I did has not proven a thing at this time though. Is ironic that bond yields are on support, broad market is up against resistance and the dollar has formed this pattern all at the same time the debt ceiling debate is about to end…..what a surprise!
Thanks to you Aaron and everyone for awesome comments and questions,
Chris
Hi Chris,
If the dollar were to breakout would be also recommend shorting commodities?
What about EUM?
Aaron
I think that when the debt ceiling is raised the dollar will break out. If no agreement by Aug 2 we will see a break down. It’s amazing how events meet at resistance points.