Dollar to break out this time?
This is posted pre-market Monday, so things could certainly change. UPDATE: The US Dollar has pulled back within its resistance as the noose tightens for a breakout one way or the other. A US Dollar rally above resistance would seem to target $76.60 as the next resistance for the Dollar Index – that is a 23.3% Fibonacci retracement from last year’s US Dollar high, a level that superb technical analyst Chris Kimble has repeatedly noted, and a level that has stymied the Dollar’s rally attempts 3 times in the last 3 months.
Commodites appear to have broken bullishly to the upside in the last week, though they are showing weakness this morning. With the Dollar poised to rally, it seems sensible to wait for these conflicting signals to resolve. It would be highly unusual for both the Dollar and commodities to rise together for any extended period.
But gold is one commodity asset that might be playing by different rules.
Bernanke declared that gold is not money. But it is rallying against the Dollar, even with the Dollar pushing higher against other Fiat currencies. So, at least in the present climate, Gold seems to be the money of choice for market participants. Chris Kimble recently suggested getting long gold as it broke above its recent resistance.