From a technical standpoint, the dollar index has crossed back beneath the 104 level which represents a key resistance level that had capped rallies all the way back to the late-1980’s.
Because the reversal comes in the context of a larger technical downtrend, and given the fact that the dollar is still about as overvalued relative to its most important trading partners as ever, it looks likely that another major peak has been put in.
If so, it may have important implications for the future of inflation, not to mention the price trends in precious metals and commodities.
This is a Hedgeye Guest Contributor piece written by Jesse Felder and reposted from The Felder Report blog. Felder has been managing money for over 20 years. He began his professional career at Bear, Stearns & Co. and later co-founded a multi-billion-dollar hedge fund firm headquartered in Santa Monica, California. Today he lives in Bend, Oregon and publishes The Felder Report. This piece does not necessarily reflect the opinion of Hedgeye.