Every investor can tell you about how the S&P 500 made a new all-time high and then pulled back 2 weeks ago. Or how Crude Oil has held steadfast over $60 a barrel throughout the trade fireworks. Or that U.S. Treasuries are being gobbled up. But did you know that the U.S. dollar is showing signs of a run to the upside? In fact the U.S. Dollar Index is now just a fraction away from closing the week at a new 2 year high.
The weekly chart below shows the story. After bottoming at the end of 2017, the greenback has steadily moved higher. Quickly at first, it had recovered to its 200 week SMA by mid 2018. The pace slowed from there and the range tightened. Since October 2018 it has spent over 90% of its time in a range between 95 and 98. If that were a stock you would stop watching it.
It is the area at the far right that makes it time to take notice again. Since the beginning of 2019 the dollar has been making higher highs and higher lows. This week marks the latest reversal and higher low. A move over the high from late April would bring it to a new 2 year high. Momentum remains bullish and supportive of such a move.
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