USD US Dollar Index Weekly Chart; Oversold; Positive Divergence; Bullish Aroon Cross; Potential Double Bottom

The US dollar index is in similar shape to the start of the year. Then, like now, everyone and his bro says the dollar is toast. It is about to fall apart. Down is the only direction. All were wrong. As was highlighted back then, the oversold conditions, falling green wedge, possie d, and maximum negativity as evidenced by the Aroon signals, meant up was the only way forward. And the dollar rallies into early April.

Of course the dollar shorts had to run and cover which adds more rocket fuel to the upward move in price, as you see with the meme stocks nowadays. The short's hair was on fire like Richard Pryor.

The greenback touches the upper band and falls back down touching the middle band and moving lower, now bumping sideways for the last month or more. Price has come down for a matching low, it is close enough for government work, so the chart indicators can be checked to see if there is positive divergence. The green lines show that the possie d remains for all the chart indicators so a bounce is expected.

The dollar bulls would be better off if price would have come down to touch that lower band at 89.22 which would tie things up in a pretty bow and set the stage for a launch, but she may be good to go now without that final check lower. Simply keep in mind that the buck may need to look at 89.22 real quick. If it occurs, it will likely be this week. If 89.22 fails, 88.80 would be on the table since Keystone's 80/20 Rule says 8's lead to 2's and 2's to 8's on the way back down. Any of this weakness would be buying opportunities for the buck.

The chart is bullish and forecasts a multi-week rally in the dollar ahead. Either a repeat of this year's up move again, which would establish a long-term sideways channel through 90-93 perhaps into year end and into 2022, or a huge sudden explosion a la the blue fractal from early 2020. That was the carnage when COVID-19 hit. Stocks tanked and the dollar spiked. Note how the dollar has fallen from grace for one year's time which has sent the US stock market to the moon.

The Aroon positive cross occurs 5 weeks ago so it is odd the dollar has not spiked or ran higher already. In the early 2020 fractal, the dollar popped about 3 weeks after the positive Aroon cross but here we are at 5 weeks now. It makes you believe that something is about to happen. The double bottom pattern is bullish. 

The pink box for the ADX shows that the dollar collapse over the last year was a strong trend lower and strong trends tend to continue but whoopsies daisies, the ADX slips out of the pink box so the move lower in the US dollar is no longer a strong trend lower. The price action verifies the ADX because price is moving sideways for over 7 months. The chart says the dollar should begin a multi-week rally higher. It may be exciting if the blue fractal repeats and a huge spike in the dollar occurs since it will crash the US stock market. That would be fun.

The up move in the buck gels with the previous CRB commodities chart that is topping-out on the weekly basis. As the dollar pops, it will tank commodities. Plan accordingly. Keep an eye on that lower standard deviation band at 89.22. Price does not have to come down but if it does it will make the bullish spring more super tight and compressed ready for a huge launch higher. Dollar up=commodities down=stocks down. 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 Wednesday Morning, 6/9/21, at 7:54 AM EST: Bond king Jeff Gundlach proclaims that the dollar will continue lower long-term. The US dollar index, USD, or DXY, the dixie, is at the 89.98 palindrome. Over the last 12 hours, the dollar falls from 90.12 to 89.98. The inflation data will impact the dollar as well as the ECB meeting tomorrow morning. The euro and US dollar currency baskets move inversely to one another. President Lagarde may coo dovishly creating a dip in the euro which may be enough to nudge the dollar higher and get the dollar shorts, like Gundlach, to begin covering.

Note Added Wednesday Evening, 6/9/21, at 6:44 PM EST: US dollar index 90.13. The buck makes a round trip since the chart was posted from 90.12 down to 89.84 then up to 90.13. The stage is set for ECB President Lagarde in the morning. Her actions and words will move the euro, which will move the dollar in the opposite direction, and sends commodities and stocks opposite the dollar move.

Note Added Thursday Evening, 6/10/21, at 6:07 PM EST: US dollar index 90.06. Euro 1.2172. ECB President Lagarde speaks and currencies tread water. The US CPI inflation comes in hot but not too bad and some metrics subsided. Psssttt. Whazzat? I guess nuttin'. I thought I heard someone whispering the 'd' word (disinflation; deflation). There it is again. Didja here dat?

Note Added Friday Morning, 6/11/21, at 8:10 AM EST: US dollar index 90.37.

Note Added Friday Morning, 6/11/21, at 10:41 AM EST: US dollar index 90.50. Shorts are clenching and puckering. USD 90.52. Clench. Pucker.

Note Added Friday Morning, 6/11/21, at 10:58 AM EST: US dollar index 90.56 and climbing. Dollar shorts are beginning to cover throwing gasoline on the upside fire. Traders stare at each other with blank stupid expressions and then exclaim, "You said the dollar has nowhere to go but down. No, you said that." Euro 1.2113. Lagarde sent the euro lower so the dollar basket moves higher. Dixie pulses back to 90.49.

Note Added Saturday Morning, 6/12/21: US dollar index 90.51 after printing a high at 90.61 yesterday. The Fed is on tap in the week ahead.

Note Added Wednesday Evening, 6/16/21: US dollar index is at 91.21 after a HOD at 91.44 so the greenback is receiving the possie d rocket launch.

Note Added Thursday Morning, 6/17/21, at 4:30 AM EST: US dollar index is at 91.64 with a HOD thus far at 91.68 printing higher highs. Euro goes sub 1.20 to 1.1954. Euro down, dollar up, commodities down, stocks down. BAC and GS abandon their calls for a short dollar going forward.

Note Added Saturday Morning, 6/19/21: US dollar index 92.32. Euro 1.186. Gold 1763. Bitcoin 35864. Commodities collapse the most in a decade. Grains, metals, sugar and lumber wipe out the gains on the year.