— Charlie Bilello (@charliebilello) July 28, 2020
Today’s Chart of the Day was shared on Twitter by Charlie Bilello (@CharlieBilello). It’s a daily candlestick chart of the US Dollar Index ($USD) over the past two years. $USD managed to move higher today, ending a seven-day losing streak. After peaking in March, the Dollar Index reversed lower and began establishing a downtrend. Going into today, Charlie pointed out that $USD is trading at its lowest level since 2018. A bounce in the near-term would not be a surprise. But, longer-term, price has made a series of lower highs and lower lows, telling you that the path of least resistance is…you guessed it, lower. The recent weakness in the Dollar has provided a boost to Stocks, Commodities, and even Bitcoin. Gold has perhaps been the biggest beneficiary of a weaker Dollar. Prior to 2020, the Dollar was in a low volatility environment and somewhat trendless. Now that volatility has picked up and price has begun to trend lower, the Dollar will likely become a bigger piece of the broader market puzzle.