The US dollar is topped-out on the daily basis just like the dollar/yen currency pair previously posted. Of course, the BOJ decision is pending and may delay the pullback. Right now, on the daily basis, the dollar should drop, yen should pop, and dollar/yen pair drop.
The red rising wedge is bearish. Stochastics are overbot agreeable to a pullback. Price prints the higher high and all of the chart indicators are neggie d (red lines) out of upside fuel and wanting to see a spankdown occur. The dollar will drop but the only thing that can alter this picture is the BOJ or Fed talk.
The gold circle shows a Golden Cross. The skies part. Angels appear. Sinners sing Hallelujah. A golden cross is a glorious event that is supposed to bring tidings of great joy and prosperity. The Death Cross is the evil twin that is supposed to usher in doom and gloom.
Every time the golden or death crosses occur, Keystone has to explain the pattern since everyone gets it wrong. Are you ready for some Golden Crosses 101? The golden cross occurs when the 50-day MA crosses above the 200-day MA and conversely, the death cross occurs when the 50-day MA stabs down through the 200-day MA.
When a cross occurs, the media goes into a tizzy treating the crosses like gospel professing guaranteed happiness ahead for stocks if a golden cross occurs or sad selling if a death cross appears. Not so fast. It is more nuanced than that. The way the patterns actually work is that a move opposite will occur when the cross occurs and the outcome will only be as advertised if the cross remains in effect. Huh? Do you understand? Uh-huh.
For the golden cross for the greenback above, price would now be expected to drop and pull back down. It takes a long time for the 50-day MA to curl higher and then poke up through the 200 so price needs a rest and it typically pulls back down when the cross occurs. This pullback lasts a few days or week or two and then price will recover again. The trick is to keep an eye on the cross. If price then recovers and starts trending higher again and the golden cross remains in effect, that forecasts happy times ahead for stocks (you receive the golden cross blessing).
However, when price pulls back when the golden cross occurs and say the drop is very severe and the golden cross rolls over into a death cross negating itself, obviously that would not forecast a rosy path forward. This is why you cannot make the blanket statement now that all is rosy going forward for the US dollar because a golden cross occurred. You have to watch the pullback expected now due to the golden cross, and the chart technicals discussed above forecast a pullback, and make sure the golden cross remains in effect, if you are a dollar bull.
Keystone is not playing long or short in the currencies right now. Central banker decisions are creating drama this week. 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 9/23/23, Saturday: USD 105.58.
Note Added 9/28/23, Thursday: USD runs higher to 106.52, a stick higher than 5 days ago, as the dollar absorbs central banker chatter, inflation data and other economic drama. HOD is 106.76. It is a good time to look at the chart to see how the news is absorbed.
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