Is The U.S. Dollar About To Reach A Melting Point?

It’s been 20 years since the last major peak in the . Could the greenback’s latest turn lower confirm another peak?

USD Chart

Today’s chart takes a macro view of the US Dollar Index and highlights the long-term down-trend at each point (1). As you can see, the buck is on a topsy turvy ride, bouncing up and down within this down-trend.

The latest bottom formed after the financial crisis and has seen the US Dollar trade within a 9 year up-trend channel marked by each (2). This gave bulls some confidence that the US Dollar may have formed a long-term bottom… Not so fast!

The broader down-trend may be exerting its force here. The US Dollar Index has formed a potential double top pattern right at its 61.8% Fibonacci resistance (as well as down-trend line resistance) – see point (3).

This bearish formation includes a recent move lower that is attempting to break a confluence of support at (4), including lateral and up-trend support lines.

The buck could melt a good deal lower if this support gives way. The next short-term support test comes into play around 87, then 82.

Disclaimer: Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. All CFDs (stocks, indexes, futures) and Forex prices are not provided by exchanges but rather by market makers, and so prices may not be accurate and may differ from the actual market price, meaning prices are indicative and not appropriate for trading purposes. Therefore Fusion Media doesn`t bear any responsibility for any trading losses you might incur as a result of using this data.

Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible.

This site uses cookies to offer you a better browsing experience. By browsing this website, you agree to our use of cookies.