Just a quick note to readers.
In a recent post, we drew your attention to the strength of the Dollar Index, and its climb against other currencies, highlighting it as just one of the reasons that have contributed to the downward pressure on the gold price over the last few years, that culminated finally in the recent and dramatic “flash crash” and mini-capitulation in the gold price.
What is interesting to note going forward however, is the Dollar Index chart itself, as shown above, and sourced from Bloomberg.
From a technical analysis standpoint, June and July saw the breaking of a long term technical analysis trend line (the top dotted GREEN line) accompanied by a long term decline in trading volume (the bottom dotted RED line).
The trend dates back to March 2009, and runs right up to this year, and is a trend line that many traders keep a very keen eye on.
As you can see from the last two entries for June and July though, for the first time in over 6 years, at no point did the Index trade above the long term trend line.
Now it remains to be seen just how pivotal this is, whether it is just a “blip”, an aberration that the Index will just shake off, or whether it represents something altogether more significant; the “sea change in sentiment” that many traders have been looking for, one that the major trading houses are either busy manufacturing, or simply taking advantage of.
Either way though, it is an important and highly influential economic indicator, that is well worth keeping a very close eye on.
To Your Secure Financial Future, as always
The Q Wealth Report Team