The Dollar Is Bouncing

Now that the Fed’s rate cut is out of the way, the dollar is poised for a more significant bounce. [Jeff Clark's Market Minute]( The Dollar Is Bouncing By Jeff Clark, editor, Market Minute When we looked at the U.S. dollar [last month]( we noted the buck was trading near its lowest level of the year. It had been falling in anticipation of the Federal Reserve Board cutting the Fed Funds target rate. 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. Recommended Link [Wall St. Icon’s Scathing AI Documentary: “I’m TERRIFIED of what comes next”]( [image]( Wall Street icon who forecasted Black Monday and dot-com crash says a new economic event will hit the American economy like a tsunami. It doesn’t matter if you’re blue collar, white collar, working, or retired. He says, “I am literally afraid for my family’s future. I’m taking drastic steps to prepare for what I know will inevitably happen next.” [Click here to see his new prediction.]( -- 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. 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. Take a look at this updated chart of the US Dollar index (USD)… [chart] [(Click here to expand image)]( 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. 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. 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. Free Trading Resources 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 – at zero cost to you. Just [click here]( to check it out. 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. 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. 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. Best regards and good trading, [Signature] Jeff Clark Editor, Market Minute [Jeff Clark's Market Minute]( Jeff Clark Trader 55 NE 5th Avenue, Delray Beach, FL 33483 [www.jeffclarktrader.com]( To ensure our emails continue reaching your inbox, please [add our email address]( to your address book. This editorial email containing advertisements was sent to {EMAIL} because you subscribed to this service. To stop receiving these emails, click [here](. Jeff Clark Trader welcomes your feedback and questions. But please note: The law prohibits us from giving personalized advice. To contact Customer Service, call toll free Domestic/International: 1-800-752-0820, Mon–Fri, 9am–7pm ET, or email us [here](mailto:contactus@jeffclarktrader.com). © 2024 Omnia Research, LLC. All rights reserved. Any reproduction, copying, or redistribution of our content, in whole or in part, is prohibited without written permission from Omnia Research, LLC. [Privacy Policy]( | [Terms of Use](