In our webinar yesterday, we discussed the US dollar and highlighted a potential wedge formation that could signal bearish pressure on the currency, especially with Trump now back in office. As you know, the Trump administration has expressed interest in a weaker US dollar and lower interest rates, emphasizing that reduced rates could support economic growth.
We also noted Trump’s focus on increasing crude oil and natural gas production, which could eventually lead to lower energy prices—another indicator of a stronger economy. Looking back to 2016–2017, when Trump first took office, the US dollar initially climbed significantly but reversed sharply in January, marking the start of a major bearish trend.
Given these parallels, I believe we might see a similar pattern now, particularly as the wedge pattern on the Dollar Index suggests limited upside. If the index breaks below 108 and 107.58, it would provide strong evidence that the wedge has completed and that a bearish trend is underway, a scenario we’ve discussed extensively over the past few weeks.
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