Six years ago, The Economist magazine illustrated the mighty US dollar on its cover. That marked a peak that has since been tested but not broken out.
The latest rally for the US dollar has the currency looking strong again but facing significant price resistance.
Today’s chart is a monthly chart of the dollar, highlighting this potentially pivotal moment. As you can see, a convergence of dual resistance has formed at (1). It is forged by a backtest of the previously broken uptrend line and the prior failed breakout test.
US Dollar Monthly Chart
Commodity investors are watching the dollar closely here. Commodities have performed well despite the US dollar's strength.
We will see what happens at (1) and if the outcome is any different this time.
