The sell-off and subsequent rallies in the and the have given commodity bulls reason to watch the forex and be hopeful.
A weak U.S. dollar (and strong Euro / Aussie) tends to be a tailwind for commodity prices.
As you can see in today’s chart, the U.S. dollar is in a trading up-trend. But it is struggling to get over its 61.8% Fibonacci level. In fact, the latest decline has come from this level.
The dollar is now nearing up-trend support at (1). This comes as the euro and Aussie are testing important resistance levels at (2).
A dollar breakdown (and euro/Aussie breakouts) would be a bullish signal for commodities – from precious metals to energy to agriculture. Stay tuned.
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