{"id":22172,"date":"2024-09-24T07:30:07","date_gmt":"2024-09-24T11:30:07","guid":{"rendered":"https:\/\/www.jeffclarktrader.com\/?p=22172"},"modified":"2024-09-24T07:30:07","modified_gmt":"2024-09-24T11:30:07","slug":"the-dollar-is-bouncing","status":"publish","type":"post","link":"https:\/\/jeffclarktrader.com\/market-minute\/the-dollar-is-bouncing\/","title":{"rendered":"The Dollar Is Bouncing"},"content":{"rendered":"

When we looked at the U.S. dollar last month<\/a>, we noted the buck was trading near its lowest level of the year.<\/p>\n

It had been falling in anticipation of the Federal Reserve Board cutting the Fed Funds target rate.<\/p>\n

And, we suspected that once that interest rate cut was out of the way, the dollar would be set up for at least an oversold bounce.<\/p>\n

The Fed did indeed cut rates last week – by 50 basis points. Currency traders correctly discounted that move by selling the dollar ahead of time. Since then, however, the buck has bounced.<\/p>\n

It’s up 1% in just two trading days – which is a large move for a currency. And, it looks to me like there’s more upside ahead.<\/p>\n

Take a look at this updated chart of the US Dollar index (USD)…<\/p>\n

\"chart\"<\/p>\n

(Click here to expand image)<\/a><\/p>\n

The dollar hit a short-term low right after we wrote about it last month. The bounce off of that low ran into resistance at the 20-day exponential moving average line (the squiggly red line on the chart), and then the dollar started to fall again.<\/p>\n

Last week, the buck dropped to a lower low for the year. But, all of the momentum indicators at the bottom of the chart made higher lows.<\/p>\n

This sort of “positive divergence” is often an early warning sign that the bearish trend is nearing an end. It’s a sign that a rally is on the way.<\/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

Once the Fed cut rates last Wednesday, the dollar started to rally. The buck has bounced back up to the resistance of its 20-day EMA.<\/p>\n

But, if it can get above this level, then it’s likely headed higher towards its 50-day moving average (the blue squiggly line) just above $102. An even stronger rally could eventually bring the 104 level into play.<\/p>\n

That sort of a move would wipe out most of the dollar’s summertime decline. The buck would turn positive on the year. And, the assets that have rallied as a result of the falling dollar (like precious metals) would give up much of their gains.<\/p>\n

Best regards and good trading,<\/p>\n

\"Signature\"<\/p>\n

Jeff Clark
\nEditor, Market Minute<\/em><\/p>\n","protected":false},"excerpt":{"rendered":"

Now that the Fed\u2019s rate cut is out of the way, the dollar is poised for a more significant bounce.<\/p>\n","protected":false},"author":61,"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":[7],"newsletter-type":[],"ticker":[],"class_list":["post-22172","post","type-post","status-publish","format-standard","hentry","category-market-minute","publication-market-minute","person-jeff-clark"],"acf":[],"ai_tts_audio_outdated":false,"ai_tts_legacy_post":false,"_links":{"self":[{"href":"https:\/\/jeffclarktrader.com\/market-minute\/wp-json\/wp\/v2\/posts\/22172","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\/61"}],"replies":[{"embeddable":true,"href":"https:\/\/jeffclarktrader.com\/market-minute\/wp-json\/wp\/v2\/comments?post=22172"}],"version-history":[{"count":0,"href":"https:\/\/jeffclarktrader.com\/market-minute\/wp-json\/wp\/v2\/posts\/22172\/revisions"}],"wp:attachment":[{"href":"https:\/\/jeffclarktrader.com\/market-minute\/wp-json\/wp\/v2\/media?parent=22172"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/jeffclarktrader.com\/market-minute\/wp-json\/wp\/v2\/categories?post=22172"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/jeffclarktrader.com\/market-minute\/wp-json\/wp\/v2\/tags?post=22172"},{"taxonomy":"publication","embeddable":true,"href":"https:\/\/jeffclarktrader.com\/market-minute\/wp-json\/wp\/v2\/publication?post=22172"},{"taxonomy":"person","embeddable":true,"href":"https:\/\/jeffclarktrader.com\/market-minute\/wp-json\/wp\/v2\/person?post=22172"},{"taxonomy":"newsletter-type","embeddable":true,"href":"https:\/\/jeffclarktrader.com\/market-minute\/wp-json\/wp\/v2\/newsletter-type?post=22172"},{"taxonomy":"ticker","embeddable":true,"href":"https:\/\/jeffclarktrader.com\/market-minute\/wp-json\/wp\/v2\/ticker?post=22172"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}