Following up on Chip's post from yesterday about the Greenback's technicals, I'm watching the US dollar index closely here as the investment implications are many. To put a finer point on it, the significance of a breakout at 74, which would be its 2nd important signal off the bottom, would suggest an initial target in the 75 - 77.50 range. Such a breakout would also hold negative short-term imlications for some commodities--particulary gold.
Intra-day, the high this morning was 73.96, so watch this gauge closely.
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Chip,
In interpreting how the charts are "reading" the minds of investors, my view is that a 74 print would represent thoughts of the Fed being done with rate cuts and the next move would be a hike. This would stand consistent with the Fed slashing rates and seeing the dollar plunge, so why would that relationship change now?
This a very simplistic view I realize and a lot depends on the ECB. But that's how I see it.