USD US Dollar Weekly Chart; US Dollar Multi-Week Rally Beginning but ECB President Lagarde Will Provide a Thursday Morning Decree

The USD, or DXY, the dixie, the US dollar, the buck, the greenback, begins moving higher as the positive divergence dictates. The bounce was expected as described a couple weeks ago. The indicators are pointing to more upside ahead for the dollar although the MACD line is a bit tricky.

The green falling wedge, overbot RSI and stochastics and positive divergence (green lines) create the bounce in the dollar. The MACD is extended to the downside so it can be given the benefit of the doubt that the bottom is in but if you look very close you can see a hair of a move lower in the MACD line as the dollar price made the low. A multi-week rally in the dollar is beginning and in progress, however, the MACD may be a wrench (spanner) in the works and slightly delay the start of the multi-week move higher by a week or two (see ECB comments below).

The dollar violated the lower standard deviation band so the middle band at 96.13, and dropping, is on the table. Note how price stopped dead at the resistance from 2018. The 93.80-ish resistance level is next. If that gives way, the 94.5-ish resistance is next and if that occurs, the middle band will be coming down by then so maybe a date at 94.5 is in the cards a couple weeks or so out.

The  monthly chart remains partly weak so another roll over and low in the dollar would be expected, on the monthly basis, after the multi-week rally ends; say a couple months out. At that time, gold would be attractive again, or actually before that, just as the US dollar multi-week rally ends with neggie d probably a month away.

All that said, the main event tomorrow is the ECB. The four central banker horseman of the financial apocalypse, the Fed (USA), BOJ (Japan), ECB (Europe) and PBOC (China), determine stock market direction. The central bankers are the market. European Central Bank President Lagarde is hiking up to the mountain on high currently and will bestow among the masses tomorrow morning the Holy rate decision. Lagarde will tell global traders how to trade during her press conference. Obviously, this event will dictate the path of the dollar going forward (euro and dollar move inversely).

If Lagarde is ultra dovish, the euro will drop and the US dollar will jump higher sinking stocks and gold. Watch the resistance levels above if this plays out.  If Lagarde is neutral, as she has been, trying to play her cards close to the vest, or even lean a bit hawkish, the euro will rise sinking the US dollar creating a stock market and gold rally. A stronger euro hurts European exporters and manufacturers (think of Germany the European economic powerhouse) so Lagarde has to be very sensitive to this direction. This information is for educational and entertainment purposes only. Do not invest based on anything you read or view here. Consult your financial advisor before making any investment decision.

Note Added Thursday Morning, 9/10/20, at 3:09 AM EST: USD 93.12. Euro 1.1819. The ECB decision and subsequent press conference is about 5 hours away.

Note Added Friday Morning, 9/11/20, at 7:20 AM EST: USD 93.14. Euro 1.1859. The euro moves higher after the ECB but note how the dollar does not move lower.