U.S. Dollar Rallies Off Support: Is This A Top Or Bottom?
Chris Vermeulen | Jun 19, 2019 11:40AM ET
The U.S.D's rally off recent support near $96.50 confirms the capital shift we have been talking about. Foreign capital is pouring into U.S. markets and the U.S. dollar as strength in the U.S. economy continues to dominate.
This upside move in U.S.D has established a new lower price channel that should continue to act as price support going forward. Fibonacci price structure dictates that a higher low and a higher high price rotation may follow. We would expect some resistance just below the $98. Yet investors will still see U.S.D as the strong currency and keep buying it longer term.
It is important to understand that strength in the U.S. dollar and U.S. economy should continue unless something interrupts that growth and continues on. It is very likely capital will continue to seek out the best returns and the best safety, which we believe is available only in the U.S. right now. Eventually, things may change where foreign markets become more opportunistic for investors and capital begins to shift away from the U.S. markets. Until that happens we believe the U.S. will continue to drive higher and likely push toward new all-time highs.
The strength of the U.S. dollar is muting the upside potential in precious metals as well as the U.S. stock market. We believe the underlying strength and opportunities resulting from the capital shift, where capital is rushing into U.S. markets, will eventually override the strength of the U.S. dollar. In other words, investors will continue to pour money into U.S. stocks and into precious metals as a protection mechanism against risk while the U.S. dollar continues to rise. If and when the U.S. dollar does rate breaks below the lower price channel, the U.S. stock market may likely breakdown as well and precious metals should skyrocket higher. Until that time, we expect a moderate price advance to continue in major U.S. stocks, the mid-caps, USD and precious metals.
Gold will likely rally from the 1340 level to just below 1380 on the next leg. Then gold will probably pause and rotate to near 1360, pause again, then rally to levels above 1400. We believe this rally may happen before July 12-15, 2019.
We've been warning our followers for months that 2019 and 2020 will include incredible opportunities for skilled traders. We've also been calling these major moves very accurately. With the U.S. elections only 15 months away, we urge all traders and investors to pay very close attention to our research and insights.
We have recently suggested that a major price may set up in late August or early September 2019. Once we get to this date or closer to the inflection point, we'll provide more insight as to what our modeling systems are suggesting.
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