Friday, August 22, 2014

How About That US Dollar Rally?

The US dollar continues to rally. Here's a weekly chart ...
(Updated chart)

  • As you can see, the US Dollar rallied right through overhead resistance at the 50% Fibonacci retracement of its big decline.
  • It's now trading at its high for a year.
  • It will likely test the 82.70 area. And it could go higher from there.
  • Momentum is not only bullish, it is strengthening.

The dollar seems to be driven by a 1-2-3 of weak Europe, strong U.S., and the general feeling that the U.S. Federal Reserve will start hiking interest rates sooner rather than later.

Naturally, a bullish dollar is weighing on gold and miners.

I recommended that Gold & Resource Trader subscribers take some mining gains recently. I probably should have recommended taking more off the table. However, gold buying is starting to pick up again, probably driven by India.

So gold and miners could do well despite a dollar rally. After all, we are entering a season that is typically good for the precious metals.

We'll see. And we'll also see if Mighty Greenback bumps its head and heads lower. 

Have a good weekend.

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