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U.S. Dollar About To Scream Higher: Will It Push Commodities Lower?

By Chris KimbleCommoditiesNov 24, 2021 03:40PM ET
www.investing.com/analysis/us-dollar-about-to-scream-higher-will-it-push-commodities-lower-200609468
U.S. Dollar About To Scream Higher: Will It Push Commodities Lower?
By Chris Kimble   |  Nov 24, 2021 03:40PM ET
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U.S. Dollar Index Long-Term Monthly Chart.
U.S. Dollar Index Long-Term Monthly Chart.

The recent U.S. Dollar Index rally is providing a headwind for commodities, while pushing other currencies down.

Should the rally extend further, it may create a bigger disturbance in the financial markets – perhaps even extending to equities.

Today’s chart of the U.S. Dollar Index takes a long-term monthly view highlights why King Dollar may be nearing an important inflection point.

As you can see, the U.S. dollar has spent most of the past 25 years inside of a falling channel marked by each (1). On the other hand, the dollar has also spent most of the past 10 years inside a rising channel marked by each (2). These two trends are converging.

More recently, King Dollar double bottomed at (3). The ensuing rally has taken it up toward its long-term falling trend line at (4).

Something has to give soon. Will it be a breakout higher and the trend change? Or, will it turn back lower? In my humble opinion, what happens to King Dollar at (4) looks quite important. Stay tuned.

U.S. Dollar About To Scream Higher: Will It Push Commodities Lower?
 

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U.S. Dollar About To Scream Higher: Will It Push Commodities Lower?

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Comments (8)
Xiaoxin Zhan
Xiaoxin Zhan Nov 25, 2021 1:31PM ET
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what iam saying you shall really provide entry stop and target to backup your trade, other wise it is meaning less.  Like Glenn Nelly say you can be the best forecaster but you can be a losing trader
Xiaoxin Zhan
Xiaoxin Zhan Nov 25, 2021 1:27PM ET
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what is your purpose post this thing with entry stop and target, btw the usd is heading to 50.  The trillion debt soon or later will cause usd to suffer
Devin Devin
Devin Devin Nov 24, 2021 8:52PM ET
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Good, and u see now nickel is breakout with oil on rebound. DXY is just manipulation
Chris Poulos
Chris Poulos Nov 24, 2021 8:27PM ET
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the usd is up 11 cents on the euro this year. its up 9 cents on the pound since the pound peaked earlier this year at 1.42. its gained 7 cents on the aussie which is a much larger % gain than against the pound. its up more than 13 yen on the year. i'd say its already screamed higher except for the fact that we're at the peak of a 12 year bull market rally that has seen the dow climb more than 500% from the 2009 lows!! everyone knows stock valuations are absurdly high right now ... if & when things cool down a bit (aka crash) the dollar could indeed get even higher.
Mohamed El Saiid
Mohamed El Saiid Nov 24, 2021 6:11PM ET
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As soon as DX hit 98, it'll be a favourable opportunity to purchase eur appr. at 1.1000 or something like that
Chris Poulos
Chris Poulos Nov 24, 2021 6:11PM ET
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im not sure what value a 25 year trendline has in the short term. considering we are overdue for a bear market correction that could see the euro tank badly i would be cautious about loading up on the euro at 1.10
Mohamed El Saiid
Mohamed El Saiid Nov 24, 2021 6:11PM ET
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Chris Poulos  As far as I suppose long term trend lines are commonly formed by large institutional traders that's why I assume that. After reaching the long term trend line EUR may be deterred from further dropping or at least a bounce will happen as it almost always happens.  I admit that EUR might go down to 1.0800 and even slump much more lower but it ruin the stocks market and don't forget that institutional speculators have large longs in gold that doesn't conforms with the possible EUR collapse. I wonder what is your vision about EUR.
Mohamed El Saiid
Mohamed El Saiid Nov 24, 2021 6:03PM ET
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DX is still on the way to 98 as the trend line is not broken
Mohamed El Saiid
Mohamed El Saiid Nov 24, 2021 5:46PM ET
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must hit 98 and after that may be whatsoever
John Swiecki
John Swiecki Nov 24, 2021 4:23PM ET
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In summary... it could go higher... it could go lower... but whatever it does... it's pretty important.
 
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