Thursday, October 15, 2015

Bombs Away in US Dollar Index -- Up Goes Gold!

It's time to take another look at the chart of the US Dollar Index that I keep posting. I previously warned that if the U.S. dollar couldn't manage a bounce soon, it would be "bombs away!" That's just what we saw on Wednesday, October 14.

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(Updated chart)

The U.S. Dollar Index made a lower low today after making a lower high three weeks ago. This is the first time we've seen the greenback show this much technical weakness in more than a year.

And you wonder why gold rallied like a rocket yesterday, eh?

And yes, the US dollar is rallying today. It looks oversold, this is a technical bounce.

More importantly, the US is headed into a budget crisis (artificially forced by the Republican majority in Congress, which is being led around by the nose by their Tea Party minority) in just 19 days. That could weigh on the US dollar even further. 

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