The US Dollar Index is defying the skeptics (including myself), continuing its rally in the face of an easy money US Federal Reserve. I am data dependent, and respecting this factor above all reasonable doubts. As the facts change, I will.
Today the US Dollar is up another 60 basis points to 77.16, taking its 1 month moon shot rally to +7.3%! This has led to a meltdown in everything commodities related, and provided the impetus for a bullish US stock market "Trade".
The "Trade" higher in the US$ is undeniably bullish, but will run out of momentum at the 77.55 level. I have attached the long term chart. All Bernanke has to do to extend this currency strength above my level, is step up to the plate and raise interest rates.
- Next level of resistance in the US$ is 77.55