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Dollar Run Has Just Begun


Despite calls for its demise, the dollar run has just begun

Terry Kinder precious metals analysisBullion.Directory precious metals analysis 20 March, 2015
By Terry Kinder

Investor, Technical Analyst

It’s still premature to call for the death of the dollar. We could discuss a veritable laundry list of reasons why the dollar should or shouldn’t rise, but the only thing that matters is what its price does. Yes, the dollar is slowly becoming undone, but its undoing isn’t going to arrive before at least one more bull run.

The Dollar Run in One Chart

We only need to look at one price chart of the dollar to learn absolutely everything we need to know about where the dollar price is headed.

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This chart shows that the strong dollar run has just begun

This chart shows that the strong dollar run has just begun

Our chart roughly squares time and price, allowing us to draw more accurate and less subjective trend-lines. Features of note on the chart are:

  • The green line drawn based on the dollar high price from 1985
  • The red line which the last bull market high price touched
  • The bold black line which mirrors a trend-line from the 1980’s dollar run

It’s fascinating how trend-lines based on natural growth patterns so clearly define trends. Had you merely been aware of the green trend-line for the dollar you would have known the dollar was near a top when the last dollar run higher occurred. You would have also seen that the dollar decline had ended back in 2012.

Going forward the two trend-lines to watch are the bold black and red line. By the end of 2017 it’s likely that the dollar price will have taken out the bold black line. There is also a good chance that the dollar will touch the red line before its bull run is over.

It’s a simple matter of geometric price patterns and determining the natural growth cycles within them, but that’s a discussion for another day.

While many have been calling for the dollar’s demise (for decades), the buck isn’t dead yet. It has at least one more bull run left in it. While it’s far from certain, the dollar may make a run at the high of over $160.00 set during the 1980’s dollar bull.

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