Have you seen a chart of the US dollar index lately? If not, check out the weekly view below…
We haven’t seen the dollar index where it is since right before the pandemic broad market selloff.
Prior to that, the last time the index was at these levels was at the close of 2016.
Notice that every time it reaches these levels, two things happen…
Where To Next?
First, price doesn’t stay in this area for very long. And second, price aggressively sells off back towards demand.
Is there a certainty that either of those scenarios are going to happen this time around?
There’s never any certainty in the market. But historically, events typically repeat themselves.
So, we shouldn’t be too surprised if we see the dollar index sell off from here.
We are in a time where more money has been printed and distributed than ever before…
Inflation is running rampant and hitting every corner of the globe…
All while geopolitical disruptions are being digested and absorbed.
I believe that during the recent weakness in the broader markets, which is traditionally when money gravitates towards gold, it’s instead been gravitating toward the dollar.
If you look at gold, you won’t notice that inverse trend against the broader markets like you can clearly see in the dollar index chart above.
This chart goes basically straight up as the broader markets have trended downward since the beginning of this year.
And this is opening up some interesting possibilities…
Meet Me in the War Room
Currencies are one of the many futures that are traded on the open market along with many others.
To learn more about other futures markets, my good friend and professional trader Josh Martinez hosts a program called Futures War Room.
Rules to Live By
“Lack of direction, not lack of time, is the problem. We all have twenty-four hour days.” Zig Ziglar
Until next time, I wish you a beautiful and blessed day!
Yours In Trading Success,
Anthony Speciale Jr.