(Updated chart)
Here is commentary I sent my $10 Trigger Alert subscribers along with this chart on Tuesday ...
You can see the dollar broke its big uptrend and went to test support at its first Fibonacci support level. Fibonnacci numbers are named after a 13th-century mathematician Leonardo Bonacci Fibonacci. He was the first to notice that these numbers and their ratios appear in nature over and over again. For better or worse, technical analysts use these numbers in trading all the time.
I think technicians saw the US dollar test its Fibonacci support and bought it for a quick rally. But the fundamentals of the US dollar haven’t changed …
- The long dollar trade is the most overbought trade in the world
- The US economy is showing signs of weakness while Europe and Japan are showing signs of coming back to life
- Guesstimates of when the US Federal Reserve will next raise benchmark interest rates are being pushed further into the future.
So, it’s likely the dollar will bang its head on its former uptrend, which has turned into overhead resistance.
That’s the big picture. In the shorter-term, smaller picture, gold and silver are taking it on the chin today. Since gold and silver are priced in dollars, they often go down when the dollar goes up.
The good news is we could see another buying opportunity ... (sorry, the rest, including my estimate on when that buying opportunity will come, is for subscribers)
Update: The FOMC meeting notes were positively doveish.
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