USD US Dollar Weekly Chart; Sideways Channel; Oversold; Positive Divergence; Lower Band Violation; Testing Critical 200-Week MA Support

There is lots of drama with the US dollar. Fed Chairman Powell offers a 50-bip rate cut today. The dollar is sinking again this week as a month of sogginess continues. Analysts and traders are standing on soap boxes proclaiming that the dollar is toilet paper and about to drop bigtime.

The US dollar weekly chart says the opposite. The dollar will rally. The sideways blue channel has been in play for over 2 years. Buy the dollar at a hundo and sell at 106; rinse and repeat. Here is another test of the bottom rail of the channel at 100. Also, price closes today at 100.28 only 8 pennies away from the critical 200-week MA support at 100.36. It is bounce or die time. The dollar is testing the moving average line's support so price will either bounce higher perhaps back to the 106 upper rail, or, die, and collapse into the abyss with a 9-handle going forward.

Price has violated the lower standard deviation band so the middle band, that is also the 20-wk MA, at 103.45, is on the table going forward as well as the upper band at 106.84. Note the tight band squeeze in July that results in a big price move but the pattern does not predict direction. The big move was lower as price rides the lower standard deviation line lower to the current price.

As price makes a lower low over the last few weeks, and matching price low to the prior lows, the chart indicators are positively diverged (green lines). The RSI, stochastics and CCI are oversold agreeable to a recovery move higher. The possie d is universal and that says the US dollar is all fueled-up and on the ignition pad ready for the ignitors to light. The stoch's and ROC show weak and bleak behavior over the last month wanting price to try and eek out a tiny-bit lower number, but the green lines show that possie d is in play over the last 2 years and over the last month for the RSI, stochastics and CCI.

The Aroon is quite a sight. No wonder the television Talking Heads are calling for more drastic weakness in the greenback. The Aroon red line indicates that the dollar bears are 100% in agreement that more dollar weakness will occur for a long time. The Aroon green line indicates that the dollar bulls are 80% in agreement that the dollar will continue lower for a long time. That's funny. Everybody and his bro are short the dollar expecting the 200-wk MA to fail and few are on the other side of the boat.

The dollar is expected to bounce from here and begin a multi-week rally higher. Those tiny red lines may create a few more days of sogginess but the rally higher should begin anytime. Let's take a quick look at the daily chart to see if we can nail down the timing for the bottom call better. Oh my. Possie d all the way on the daily chart for all the indicators. She is ready to start rallying and begin the multi-week move higher right now. The 2-hour chart is also set up with possie d although it is goofy due to the Fed craziness in the afternoon.

Contrary to what the Wall Street pundits and analysts say, the dollar is set to start rallying higher beginning a multi-week rally. Gold bugs take note. Lots of folks should be surprised since everyone, including the Uber driver and Door Dash delivery guy, say the dollar is going to weaken further. The dollar is on the launchpad and is about to take off higher due to the possie d. Keystone is not playing the dollar long or short currently but obviously the trade going forward would be long the dollar. 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, 9/19/24, at 4:46 AM EST: The dollar starts to feel the positive divergence launch, running up to 101.47, but then global traders stopped to think, and realize the Fed will always be dovish to always protect the wealthy in the crony capitalism system, so the 50-bip cut should weaken the dollar. Bloop, down she goes, now at 100.60. Markets will likely be choppy a few days sorting out the Powell drama but the daily chart will not change and a rally in the dollar would still be expected going forward, despite the Fed constantly flapping dovish wings. Gold pops +1% on the intraday dollar retreat to 2585. Watch the USD 200-week MA S/R at 100.36; dollar bulls need it to hold; dollar bears want it to fail.