I believe we are headed toward a stronger dollar. In the chart is the trade weighted dollar index, which is a larger basket of foreign currencies than DXY... 
DXY is mostly pegged to the EUR/USD with around 65% of its currencies reflecting the Euro or currencies that are heavily reliant on the Euro. The trade weighted index is therefore a better representation of the dollar as it factors in more currencies.
Bullish divergence has formed in the chart above on the RSI as well as the MACD. Previous bullish divergence (shown) lead to a trend change and ~9% gain in the dollar. Looking for a consolidation 89-90 level then a breakout higher.
One catalyst for this move would be President Trump's repatriation of overseas dollars. I am already under the assumption that that world is short dollar supply, thus this repatriation would further choke the supply. I believe that this will cause a correction in the stock market.
Subsequent plays: short commodities, short emerging markets, long precious metals, long dollars, and long yields.
*not a pro trader & this is not advice
DXY is mostly pegged to the EUR/USD with around 65% of its currencies reflecting the Euro or currencies that are heavily reliant on the Euro. The trade weighted index is therefore a better representation of the dollar as it factors in more currencies. Bullish divergence has formed in the chart above on the RSI as well as the MACD. Previous bullish divergence (shown) lead to a trend change and ~9% gain in the dollar. Looking for a consolidation 89-90 level then a breakout higher.
One catalyst for this move would be President Trump's repatriation of overseas dollars. I am already under the assumption that that world is short dollar supply, thus this repatriation would further choke the supply. I believe that this will cause a correction in the stock market.
Subsequent plays: short commodities, short emerging markets, long precious metals, long dollars, and long yields.
*not a pro trader & this is not advice
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