DXY

The dollar's steep fall since March mirrors the egregiously overdone rally that has occurred in nearly everything else. There is no good reason for the dollar to be plummeting, but on Wall Street a bad reason will always suffice, especially in times when outright insanity rules the markets as it is doing now. That said, there are reasons to expect a turn from the current low, which touched a 93.57 downside target on the hourly chart Monday. I'd be surprised if there's no significant bounce, given the clarity of the pattern, However, I am prepared for more slippage nonetheless, possibly to the trendline shown. It comes in around 91.61, almost exactly two points lower. Here's a chart that shows this. Regardless, the pullback to the green line (94.48) must be regarded as a promising 'mechanical' buying opportunity, stop 88.24.  We'll paper trade this one, but I should note that all such trades presented here over the last several months have been winners. ______ UPDATE (Jul 29, 7:37 p.m.): Any further slippage beneath the 93.57  'hidden' support will send the dollar down to 91.61 in search of good traction. ______ UPDATE (Jul 30, 2:39 p.m.): So much for the 93.54 support. You should use 91.61 as a downside objective for the near term. _______ UPDATE (Aug 3, 5:48 p.m.): Despite the rally since Friday, the damage has already been done, and I still expect lower lows. Regardless, I'm going to back away for a week or two, since price action in the currencies in general has gotten extremely tiresome. They used to be good 'non-correlating' vehicles to trade, but these days even the 100% manipulated Swiss franc acts like an eighth  grader's science project.

I have not updated my perennially bullish outlook for the dollar for a long time, and you can see why in the chart. DXY has come of March's 103 high with a so-far 6.3% sell-off that has done no technical damage to the long-term uptrend. Actually, a further selloff of 3.6% would come down to a trendline that is likely to evince good support. Pivoteers may also notice that a pullback to the green line would trip a strong 'mechanical' buy signal that is about as textbook as such trades get. 'Mechanical' trades work best when speculators get too far ahead of themselves in either direction. The pullback to the green line is Mr. Market's way of reminding them that overconfidence seldom pays off. The bullish outlook also implicitly raises a question that seems not to be troubling traders at the moment -- namely, what kind of moron would be buying the euro and other currencies in preference to dollars? Indeed, the rally in the euro is as stupid and groundless as the one in U.S. stocks at the moment. No currency will supersede the dollar, simply because it is the only currency big enough to facilitate the quadrillion dollar shell game that makes paper-shufflers rich. Also, the world will continue to prefer to pay for real things, most particularly crude oil, with a currency that is in practically infinite supply.  If you read anything suggesting that the dollar has entered a bear market, save your time energy, since it was written by some bozo with poor comprehension of the currency market's underlying dynamics. _______ UPDATE (Jul 21, 7:18 p.m.): I road-mapped a potentially nasty correction months ago, and so it has been. But the dollar will generate a 'mechanical' buy at 94.48, stop 88.25 if it falls to the

With the scent of disaster hanging over the world's markets this morning, the dollar is down. But not by much, and I doubt it will stay down for long. Following is my post in the trading room, a response to a note from 'Marko' that Franco-Nevada founder Pierre Lassonde is bearish on the dollar. I am not -- and haven't been for 40 years. Here's why: "What reason did Lassonde give for this? I ask because I doubt that he could provide a satisfactory one. The dollar is down somewhat at the moment -- against exactly what I cannot figure out -- but this is probably because the world hears Trump and the Fed promising to supply more or less infinite dollars to "shore up The System." Can they do this? I have argued for more than three decades that they could not, but I guess we will just have to wait and see. Banks Hold Little Cash Neither Lassonde nor any other bankster I am aware of seems to have thought this through. I have, though, having noticed how difficult it was to withdraw just $25,000 in cash money from a Wells Fargo branch when all hell was NOT breaking loose.  I have also asserted -- dozens of times -- that a severe shock to the financial system could unravel the clearing network that allows credit cards and ATMs to work. Did Lassonde mentions this little, ahem, problem? Has he or any of his colleagues ever even thought about it? Of course not. Is it nonetheless possible? Yes, inarguably. And is it possible to keep the global financial system, most particularly the intricate gearwork of the vast repo market, liquid when it is imploding? I seriously doubt it, but I am willing to suspend disbelief for the moment. But

The dollar's steep rally this month is close to generating a powerful impulse leg on the daily chart. Just another 0.15 points (see inset) and DXY will exceed an external peak at 99.25 recorded back in early October. That would refresh the bullish energy of the chart while increasing the odds that any weakness, unless severe, would be corrective and therefore a buying opportunity. This scenario is congruent with my bullish outlook for T-Bonds, but it would also keep gold under pressure. This could turn out to be less threatening than it sounds, since precious metals have held up well recently not only against a strong dollar, but in the face of a stock-market rally that has been nearly relentless. _______ UPDATE (Feb 19, 7:34 p.m. EST): The Dollar Index is closing fast on a clear Hidden Pivot resistance at 100.01. If bulls blow past it, that would suggest that still higher prices, possibly  significantly so, lie ahead. Here's the chart. _______ UPDATE (Mar 2, 11:11 p.m.): After missing the 100.01 target by a dime, DXY has plummeted $2.61. The key to the chart lies in the fact that the high was bullishly impulsive because it exceeded a small but distinctive 'external' peak at 99.89 recorded in May 2017. This suggests the plunge of the last two weeks is corrective and that when it ends bulls will regain dominance.

Three months after bottoming an inch from a well-advertised Hidden Pivot target at 96.40, the Dollar Index has generated its first bullish impulse leg on the 240-minute chart. This was accomplished with great subtlety, since DXY exceeded the requisite external peak I'd identified by just a penny. That's all it took, though, to transform the balky rally of the last three weeks into a promising new start for the greenback. Now, any retracement that stays above 96.36 will be presumed corrective and therefore a buy. It remains to be seen how much pressure a waxing dollar will put on bullion, but as a chat room denizen noted, gold more than held its own when the dollar rallied sharply in the June-October period. _______ UPDATE (Jan 27, 10:05 p.m.): A Hidden Pivot resistance at 98.13 is a logical place for a short-term top. ________ UPDATE (Jan 28, 9:04 p.m. EST): DXY dropped 0.22 points after peaking at 98.16, just three cents above my target. Let's see how long the top holds. _______ UPDATE (Feb 1, 10:49 p.m.): The selloff from within pennies of the 98.13 target I'd flagged continues to lengthen, but support should come in around 97.10. Let's see how it fares. _______ UPDATE (Feb 4, 9:57 p.m.): The dollar got traction at 97.37, well above the support I'd flagged above. This is mildly bullish, but DXY will needed to take out the old high at 98.19 to generate some excitement. _______ UPDATE (Feb 5, 9:56 p.m.): The dollar easily cracked  the 98.19 resistance. Now, if it blows past the 98.47 target shown in this chart, it would imply bulls are still rarin' to go. ______ UPDATE (Feb 6, 9:00 p.m.): DXY easily pierced the 98.47 'hidden' resistance, implying that still higher prices are coming. ________ UPDATE (Feb 10, 9:37

I've been steadfastly bullish on the dollar for years, in part because a strong dollar is congruent with the deflationary endgame that seems likely when the stock-market bubble bursts. Even so, it's conceivable we could see an inflationary blip along the way, especially under a president who seems determined to weaken the dollar to help U.S. manufacturers.  The intermediate-term chart (inset) therefore bears watching, since it could provide us with evidence that the dollar weakness since early October is about to intensify.  Despite Friday's robust bounce from the trendline, I expect a relapse to reach the target. If it breaches it, and especially if the downtrend goes on to exceed June's low at at 95.84, that would be the first yellow flag we've seen in the greenback since August 2017.______ UPDATE (Jan 1, 3:50 p.m. EST): Yesterday's low slightly exceeded the 96.40 target shown in the chart. (I somehow failed to mention this target in the tout when I published it two weeks ago.) The bounce so far has been fleeting and feeble, hinting of still lower prices to come. ______ UPDATE (Jan 7, 10:38 p.m.): Heightened tensions with Iran have given the dollar good reason to rally, and yet it is barely getting any loft from the 96.40 Hidden Pivot noted above. This is plainly bearish and will remain so unless the crisis escalates significantly. _______ UPDATE (Jan 13, 5:55 p.m.): DXY's rally has lengthened modestly since the 96.40 bottom was in, but bulls will need to surpass 97.94, where a small 'external' peak was recorded Dec 2 on the hourly chart, for the uptrend to gain credibility. _______ UPDATE (Jan 24, 9:34 a.m.):  DXY is just an inch shy of the 97.95 print required to re-energize and extend the bull run from the predicted low at 96.40 low

I rarely update my dollar forecast because 1) my very-long-term outlook is unshakably bullish, and 2) subscribers do not trade it. Nevertheless, the dollar sold off hard last month, raising mild concerns about whether the long-tern trend has changed. A glance at the weekly chart, however, reveals little technical damage. Regardless, I'll need to start treating the chart as I would some trading vehicle I don't care about. Strictly speaking, a further decline touching the green line would put p=92.67 in play as a downside target. I refer to it as my worst-case scenario in the chart, but in fact 85.67, the pattern's 'D' target, would be the actual worst-case possibility. That is unimaginable to me, and so I've put it out of mind.  'Impossibilities' aside, I'll be watching for 'counterintuitive' buying signals each time DXY takes out a new low on the weekly chart. The nearest of them lies at 97.03, and thence at 95.84. _______ UPDATE (Nov 8): Interesting that a market as vast as the dollar should rally following a cheesy fake-out low that exceeded a previous one by a few cents.  That is what has happened, however, as this chart makes clear.  The rally would look more sincere if and when it exceeds the external peak at 98.65. _______ UPDATE (Dec 4, 6:44 p.m.): The greenback has taken a moderate fall after going no higher than 98.54, just 12 cents shy of our bullish trigger price. The weakness would become significant if it exceeds the 97.03 low recorded on August 9.

We'd been focused on a Hidden Pivot at 99.05 as a target for this phase of the dollar's long-term bull market, but when DXY sold off sharply without having reached it, I took a closer look at the daily chart. The slightly altered pattern yields a new target at 98.93 that turns out to have caught the exact top of last week's rally. The pullback so far has been moderate and has not diminished my bullish bias for the long-term. But given the decisive precision of the recent top, it would appear that bulls are spent for the time being. _______ UPDATE (Sep 23, 6:15 p.m.): Here's a chart with a new target at 99.94 that is starting to look better than the one given above. Use it with confidence, but don't expect the dollar to get there any time soon. A pullback to 97.76 would trigger a 'mechanical' buy signal. _____ UPDATE (Oct 20, 2:33 p.m.): The dollar's steep slide this month has caused whack-a-mole bears to surface in droves, but here's a chart to remind us that the dollar is still in a bull market and that it will become a buy at some point. At the moment, the rABC pattern shown implies the signal to do so would trigger at 97.49 provided the C low at 97.14 has not been breached.

The correction begun from 98.37 a month ago is about to run out of room. For one, there's a clear and compelling Hidden Pivot support at 95.94 where we might expect a turnaround. And if it fails, there's a structural support just below it at 95.74 that's tied to an important low recorded in March. It can be used as a point 'A' for purposes of setting up a counterintuitive buy signal. Regardless of whether you trade this vehicle, a 'CI' buy signal would have bearish implications for gold, which for the last three weeks has been in one of the most promising rallies in years. A strong dollar would affect the entire universe of investable assets, so we'll want to monitor DXY's price action diligently. _______ UPDATE (Jun 27, 5:50 p.m.): The low I'd projected is holding so far, with a bottom 10 cents off the 95.74 support noted above.  However, DXY has not gotten much loft and will remain in the danger zone until such time as it pops above 96.80. _______ UPDATE (Jul 1, 7:37 p.m.): DXY has put some distance between itself and the recent low I'd predicted, but bulls are still not out of  the woods. That would take, for starters, a rally exceeding the 97.76 peak shown in this chart. _______ UPDATE (Jul 30, 10:56 p.m.): The Dollar Index has slightly exceeded the 97.76 peak noted above and now faces key resistance from some peaks recorded in May and June. If and when it exceeds them, look for more progress most immediately to the 99.05 target shown in this chart.