2020-07-30

Is the U.S. Dollar Bull Market Over?

Timewise, the U.S. dollar rally was on its last legs in 2020. The prior dollar bull market lasted about six years. There is still the possibility of extension. Macrowise, it should have broken out, but central bankers have intervened at multiple points in 2016, 2018, 2019 and 2020. Moving forward, will the U.S. avoid any correction in the market and move straight into expansion, or will this all blow up in central bankers faces next year? The similarities to the Nasdaq melt up in 1999 and the commodities melt up in 2008, make me still lean towards a much higher U.S. dollar before this cycle ends. Support for the dollar is at 88, and then 83, with 99 being the more important level. Since the euro is by far the most important component of the DXY, it will give a bullish signal long before DXY. A EURUSD advance to 1.21 would invalidate the large topping pattern. The euro only need advance 2 percent to achieve that feat.

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