This 5-pack looks at the US$ and several currency ETF’s that seem to highly influence commodity prices
Last week the US$ was testing 1-year falling support above (lower right chart), where it might have created a bullish reversal pattern (bullish wick) at this support line. Let me make this clear, I am NOT saying that one week’s price action in the US$ makes a trend.
On the flip side, the Aussie$ (NYSE:FXA), Canadian$ (NYSE:FXC), euro (NYSE:FXE) and the Swiss franc (NYSE:FXF) may have created bearish reversal patterns (bearish wicks) at falling resistance lines (at the red arrows).
Commodities remain in a down trend (lower highs and lower lows). What these “commodity-sensitive currencies” do at falling resistance will have a big impact on whether commodities can breakout of this trend over lower highs and lower lows. What King Dollar does at support could have a big impact on gold, silver and copper in the near future.
What FXA, FXC, FXF, FXE do at falling resistance should give us a big clue as to where commodities might be a couple of months from now. If they breakout, the CRB index could do well. In some ways, the world might hope these currencies breakout to keep global deflation at bay.