Dollar Index Is Poised for an Upside Reversal

When I look at the charts and few indicators of the U.S. Dollar Index I come away with the belief that it is poised for an upside reversal. A weak dollar this year has probably been one more background element that contributed to the stock market's rally, but that supportive input may have run its course. Let's examine a few charts.

Looking at a daily chart of the Dollar Index (DXY), below, we can see that the index peaked in December and has been declining this  year. Prices are below the declining 50-day and the declining 200-day moving average lines. In the lower panel is the slow stochastic indicator. This misnamed technical tool is a measure of how overbought or oversold a market is  -- the DXY got very oversold in July....120 more words left in this article. To read them, just click below and try Real Money FREE for 14 days.

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