A relatively docile dollar has allowed a broad swath of investables to meander for the last three weeks, but that could change if the Dollar Index pops above a key high at 81.44 recorded about 13 months ago. DXY has been marking time since mid-December, but the relatively shallow pullbacks during that time suggest that it is in consolidation rather than distribution. Moreover, a subtle sign that the implied thrust could happen soon can be seen in the bullishness of the hourly chart (see inset). Yesterday’s surge stalled precisely at the 80.33 midpoint resistance of the larger pattern, but if that number is exceeded today, dollar bears had better prepare to take flight, since the ‘D’ target to which it corresponds is 81.13. Exactly what a flight to the supposed safety of the dollar implies for the geopolitical world is impossible to say, but it is foreseeable nonetheless that the news will not be felicitous.
