{"id":20527,"date":"2023-01-26T07:30:46","date_gmt":"2023-01-26T12:30:46","guid":{"rendered":"https:\/\/www.jeffclarktrader.com\/?p=20527"},"modified":"2023-01-26T07:30:46","modified_gmt":"2023-01-26T12:30:46","slug":"this-major-currency-is-signaling-a-brief-comeback","status":"publish","type":"post","link":"https:\/\/jeffclarktrader.com\/market-minute\/this-major-currency-is-signaling-a-brief-comeback\/","title":{"rendered":"This Major Currency Is Signaling a Brief Comeback"},"content":{"rendered":"

The U.S. dollar has been on one wild roller coaster ride.<\/p>\n

From May 2021 to September 2022, the U.S. dollar index (DXY) surged over 28%. That’s an incredible rally for any currency, let alone the dollar.<\/p>\n

For additional context… prior to its monster move in 2022, the dollar traded in a 14% range for the last four<\/em> years.<\/p>\n

This volatility isn’t going anywhere either…<\/p>\n

Since topping out in September 2022, the dollar has given back over 50% of its gains.<\/p>\n

It’s possible that the dollar has put in a major top, and we’re still in the early stages of a new bear market cycle. But whether that’s true or not doesn’t matter to me as a currency trader…<\/p>\n

A Comeback for the Dollar<\/h2>\n

In fact, one of the reasons I love trading the foreign exchange (forex) market is because one currency can’t go up in value without another going down.<\/p>\n

The value of one currency is always relative to the value of another.<\/p>\n

So, whether the dollar is going up or down, there’ll always be a great forex trade just a few moments away.<\/p>\n

But right now, in the case of the U.S. dollar, I think we’re going to see a bit of a comeback.<\/p>\n

Let’s look at a short-term chart of DXY to see what I mean…<\/p>\n

\"Chart\"<\/div>\n

There are two important things going on here…<\/p>\n

First, DXY is trading within a falling wedge pattern<\/strong> (blue trendlines).<\/p>\n

The key characteristic of a falling wedge is how both trendlines are pointing down, containing prices. Eventually, those lines will meet one another. That’s what gives the pattern its wedge-like shape.<\/p>\n

A wedge is typically a reversal pattern. The pattern is complete once prices break out of the upper trendline. A completed wedge usually sees prices travel back to the start of the pattern.<\/p>\n\n\n\n
\n

Free Trading Resources<\/strong><\/p>\n

Have you checked out Jeff’s free trading resources on his website? It contains a selection of special reports, training videos, and a full trading glossary to help kickstart your trading career \u2013 at zero cost to you. Just click here<\/a> to check it out.<\/p>\n<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n

For DXY, that would mean a move back to at least the 103.35 level – the peak on January 10.<\/p>\n

The second thing going on with this chart is the extreme bullish divergence<\/strong> in the Moving Average Convergence Divergence (MACD) indicator at the bottom of the chart.<\/p>\n

The MACD measures momentum and can often be a leading indicator for big moves.<\/p>\n

Notice how as the dollar traded lower throughout January, the MACD started to trend higher. This is what technical analysts call bullish divergence<\/em>.<\/p>\n

The combination of bullish divergence and the falling wedge tells me there’s hidden buying pressure in this market.<\/p>\n

Eventually, that pressure won’t be able to build anymore, and it’ll have to be released.<\/p>\n

When that happens, I expect to see DXY break out of its wedge and trade higher toward 103.35… ushering a potentially profitable opportunity for traders.<\/p>\n

Happy trading,<\/p>\n

Imre Gams
\nAnalyst, Market Minute<\/em><\/p>\n

P.S.<\/strong> Last night, Jeff Clark shared one of his most urgent warnings yet about a market anomaly that could cause 44 days of extreme volatility…<\/p>\n

Jeff says that if you’re just buying and holding stocks… you’ll get slaughtered. But if you follow his “crash-proof” strategy, then you could make more money in the next 44 days<\/a> than most people make in an entire year… even if stocks are crashing.<\/p>\n

If you couldn’t watch the entire interview last night, I highly recommend you click right here to watch the replay<\/a> and learn how to prepare for the next 44 days.<\/p>\n

<\/p>\n

Reader Mailbag<\/strong><\/h2>\n

What do you think will be the dollar\u2019s next move?<\/p>\n

Let us know your thoughts – and any questions you have – at feedback@jeffclarktrader.com<\/a>.<\/p>\n

<\/p>\n","protected":false},"excerpt":{"rendered":"

Whether this currency is going up or down, there\u2019ll always be a great forex trade just a few moments away\u2026<\/p>\n","protected":false},"author":49,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"ep_exclude_from_search":false,"service":"","footnotes":""},"categories":[1],"tags":[],"publication":[10],"person":[76],"newsletter-type":[],"ticker":[],"class_list":["post-20527","post","type-post","status-publish","format-standard","hentry","category-market-minute","publication-market-minute","person-imre-gams"],"acf":[],"ai_tts_audio_outdated":false,"ai_tts_legacy_post":false,"_links":{"self":[{"href":"https:\/\/jeffclarktrader.com\/market-minute\/wp-json\/wp\/v2\/posts\/20527","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/jeffclarktrader.com\/market-minute\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/jeffclarktrader.com\/market-minute\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/jeffclarktrader.com\/market-minute\/wp-json\/wp\/v2\/users\/49"}],"replies":[{"embeddable":true,"href":"https:\/\/jeffclarktrader.com\/market-minute\/wp-json\/wp\/v2\/comments?post=20527"}],"version-history":[{"count":0,"href":"https:\/\/jeffclarktrader.com\/market-minute\/wp-json\/wp\/v2\/posts\/20527\/revisions"}],"wp:attachment":[{"href":"https:\/\/jeffclarktrader.com\/market-minute\/wp-json\/wp\/v2\/media?parent=20527"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/jeffclarktrader.com\/market-minute\/wp-json\/wp\/v2\/categories?post=20527"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/jeffclarktrader.com\/market-minute\/wp-json\/wp\/v2\/tags?post=20527"},{"taxonomy":"publication","embeddable":true,"href":"https:\/\/jeffclarktrader.com\/market-minute\/wp-json\/wp\/v2\/publication?post=20527"},{"taxonomy":"person","embeddable":true,"href":"https:\/\/jeffclarktrader.com\/market-minute\/wp-json\/wp\/v2\/person?post=20527"},{"taxonomy":"newsletter-type","embeddable":true,"href":"https:\/\/jeffclarktrader.com\/market-minute\/wp-json\/wp\/v2\/newsletter-type?post=20527"},{"taxonomy":"ticker","embeddable":true,"href":"https:\/\/jeffclarktrader.com\/market-minute\/wp-json\/wp\/v2\/ticker?post=20527"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}