Moment of Truth for the U.S. Dollar

The U.S. Dollar is on the ropes and its next move is critical…

Investors have an important decision to make — one that is largely tied to the overall confidence in the equity markets. Should stocks tumble, money will inevitably flee to safety. This means currencies of perceived stability (USD, YEN) and commodities where the underlying asset stores value (gold, platinum, precious metals, etc.) should appreciate in value.

In the Dollar Index (DXY) chart below, shares are closing in on a key breaking point, one that will define a clear trend throughout much of 2019 and possibly beyond.

US Dollar 7 11 18 300x280 - Moment of Truth for the U.S. Dollar

The DXY currently sits in a common technical setup known as the head-and-shoulders pattern.

In this case, however, we’re looking at a “bullish” reverse head-and-shoulders scenario where the head forms below the shoulders.

The horizontal neckline in black marks areas of price resistance. In other words, inflection points where the DXY has been held in check from further advances higher. With the right shoulder near completion, the pattern will either pierce the horizontal neckline or trap the bulls in a head fake and fail one last time just prior to a sharp decent.

While it’s never wise to predict price movement without confirmation of a pattern breakout, we know a big move is just around the corner (where the green and red lines diverge away from each other). Thus, the floodgates will inevitably open no matter how many pieces of gum are jammed into the growing cracks.

That said, investors should be ready to pounce the moment market clarity arrives. As always, we’ll be there to monitor the situation and provide actionable investment ideas to not only weather the storm but profit from these developments as well.

Good investing,
Reflex Investor

P.S. Check out our comprehensive financial newsletter, Reflex Momentum Report. It uncovers “under the radar” investment opportunities, marrying fundamental quality with critically important technical timing to enhance potential returns.

 

 

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