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US Dollar Trend Looking Up


A look at the US Dollar trend using the weekly DXY chart

Terry Kinder precious metals analysisBullion.Directory precious metals analysis 17 September, 2014
By Terry Kinder

Investor, Technical Analyst

Given the relationship between the US Dollar price and the price of gold and silver, gaining a better understanding the US Dollar trend is a worthwhile investment of time.

A look at the US Dollar trend

US Dollar Trend as captured by the Weekly DXY

As can be seen clearly from the weekly DXY chart, the US Dollar trend since 2006 has been choppy. The US Dollar price has been contained within a symmetrical triangle. As price has drawn nearer to the end of the pattern, the high price has trended lower while the low price has trended higher. This has created an odd picture. Overall, the US Dollar price is lower from the beginning of the pattern in late 2005. Yet, from 2011 to today, the dollar has marched higher.

Unfortunately, triangle chart patterns aren’t necessarily the best ones to help determine what the future price will be. However, in a bull market, they tend to perform well. It would be difficult to argue against the US Dollar trend being anything but a bull (or perhaps a bull within a much larger bear) given its march from $72.69 in May 2011 to over $84.00 today.

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Given the current US Dollar trend, there is a good chance it continues higher. At a minimum, it would be hard to make a case for it plunging downward out of the triangle. Some levels to watch for on the DXY:

  • $83.74 – $83.82
  • $81.47 – $81.55
  • On the upside, keep an eye on:

  • $84.92 – $85.00
  • $86.04 – $86.13
  • At this point, should the US Dollar trend reverse lower, it seems probable it would find support at the $81.47 – $81.55 level.

    The US Dollar trend continues to trend higher. If this trend continues, it is likely to continue to exert downward pressure on gold and silver prices.

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    1. Amazing! Yellen points out that nearly everything in the economy sucks, and it’s risk on. Bubbles and their infinite glory.

      In less than 20 years, the US equity marks have been halved due to the same BS. Ignorance is bliss, until your “least dirty shirt in the laundry pile” account is feeling a little 2008ish.

    2. Strong downward trending resistance. I think only a close above 84.50 on the daily or longer is worth a higher push.

      The algos will likely push this $1+ in either direction once the minutes are released. Spikes are fun to watch, but mean little 😀

      I think we’ll see 82 by mid-Oct.

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