King Dollar About To Rally Off Support and Drive Down Commodities?

by Chris Kimble

Inflation pressures are increasing as the economy tries to digest a prolonged period of higher commodity prices.

While select commodities have pulled back (and this has investors hopeful that inflation moderates), the broader commodities arena remains elevated.

So what’s next? That may depend on one major influence — the U.S. Dollar.

We are primarily funded by readers. Please subscribe and donate to support us!

King Dollar has been weak over the past year and that has been a tailwind for commodity prices. But the US Dollar is currently testing an important technical support level marked by its rising up-trend channel and horizontal support (2009/10 highs and recent lows). Commodity bulls hope the US Dollar breaks down and continues lower…

For reference, the chart below also shows the Euro. A stronger Euro also is good for commodities. The Euro is currently testing major resistance and commodity bulls would love a breakout here.

If the US Dollar breaks down below trend support and the Euro breaks out, commodity prices could surge once more. If not, they may come back to earth. This is a BIG trend test. Stay tuned!

This article was first written for See It To see the original post CLICK HERE.



Leave a Comment

This site uses Akismet to reduce spam. Learn how your comment data is processed.