Dollar Retesting Major Resistance
Dominic Cimino | Dec 22, 2014 10:29AM ET
As this weekly bar chart shows, the US Dollar is at a significant crossroads. The low 90.00 area on the chart is highlighted in bold green. Notice the significant resistance and support this area has provided for Dollar Index over the last 17 years, as noted by the red arrows. It can be argued the Dollar has overall been trending sideways since 2006 (e.g. shown by the blue arrow); while more recently it appears to have been trending upward in a channel formation since 2011. It may have recently broken out of this channel to the upside, but the significant 90.00 - 93.00 resistance area looms above.
One thing I always enjoy mentioning is the Dollar Index placed its low in early 2008, well
before all the trillions of Dollars were supposedly added into the financial system. What a divergence? The Dollar has rallied ever since, and the last time it moved above the 90.00 - 93.00 resistance area in 1997 the stock market saw significant gains until the first recession hit. This area is clearly an important one to watch. What will happen when the major resistance is now retested again? Will resistance hold, or is this the inception of a new long-term bull market for the Dollar?
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