FOREX Charts: U.S. Dollar Index Slammed
The U.S. Dollar Index fell sharply to hit a two-week low on Monday. Traders sold dollars and bought stocks after the long Fourth of July holiday weekend.
On the daily chart, the move broke a short-term bullish trend line, ending a nascent series of higher lows and higher highs. The move may herald the resumption of a longer-term bearish move, as the greenback has fallen from nearly 103 in mid-March (upper left of chart) to 96.68 on July 6th.
On the weekly chart, the U.S. dollar index has formed an A B C D pattern:
The A B C D pattern on the U.S. dollar index projects that bellwether to the 94.50 area.
The U.S. dollar is considered a safe haven currency, meaning that it rises when investors seek safety. The fact that the dollar is falling, along with the rising stock market, tells us that investors are feeling confident.
Meanwhile, U.S. stocks are roaring higher in early Monday trading. The S&P 500 is trading in a bull channel (parallel lines) and needs to break above its June high of 3232 to keep this party going.
According to a Stanford study, the U.S. economy is adjusting to the realities of the Covid-19 pandemic.
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