A unique setup has occurred in the UUP (Invesco DB US Dollar Index) that resembles an Engulfing Bearish type of pattern (even though it is not technically an Engulfing Bearish pattern). Technically, an Engulfing Bearish pattern should consist of a green candle followed by a larger red candle whereas the red candle’s body (the open to close range) completely engulfs the previous candle’s body. In the
This is when two red candles
Below, we have highlighted the traditional
When we consider the totality of this US Dollar move, a falling US Dollar will result in a number of other relative price swings across almost all of the major global markets. One thing that is immediate for our research team is that any price decrease in the US Dollar will likely prompt a further advance in the price of Commodities. Commodities are tied to the US Dollar because almost all trade is based in UD Dollar value. When the US Dollar rises, commodities become more expensive for foreign buyers. When the US Dollar falls, commodities become less expensive for foreign buyers. Therefore, any price decline in the value of the US Dollar should prompt an increase in commodity prices.
Additionally, any sharp decline in the price of the US Dollar should also prompt a rally in Precious Metals and Mining Stocks. Precious Metals react to US Dollar pricing just like Commodities do. As the US Dollar strengthens, Precious Metals tend to fall as a means to counter the increased cost basis for these metals. Under normal economic pressures, the precious metals react to pricing based on
Our belief is that the US Dollar will rotate lower over the next few weeks headed into the uncertainty of the US mid-term elections and that the Commodities and Precious Metals markets will likely increase in relation to this US Dollar weakness. These potential price swings present very clear opportunities for skilled traders. Our research team follows almost all of the global markets in an attempt to keep our subscribers aware of opportunities and trends that exist in the global markets. If you want to see why our subscribers stay with us and believe in our ability to assist them in finding greater success, then visit www.TheTechnicalTraders.com