Dollar Strength at a Critical Point 7/28/2020

The DXY at the monthly view.

The dollar strength is at a critical point right now. It's at the bottom of the 9 year uptrend support. This support has saved the dollar on several points of time. With all the money printing and institutions shorting the dollar, the dollar is at a historical point.

If the dollar breaks down, that would cause instability within the financial sector. The inflation would cause quite a bit of chaos within the financial sector as their purchasing power and assets would depreciate. That would accelerate recessionary effects upon the general population. In this scenario, commodities and cryptocurrencies may soar to new highs. However, if the dollar cannot find support, then the actual purchasing power of commodities and crypto will also fade after selling.

If the dollar bounces hard, then we may see a corrective pullback in commodities, crypto, and equities. This may bring back volatility within the markets. This volatility will produce opportunities in almost every sector. The financial sector would not destabilize as their purchasing power and assets would not depreciate.

The third scenario is that the dollar just gets dragged along the monthly support. That would put precious metals at a neutral halt and still keep the financial sector intact.

I prefer keeping this trend and let it bounce hard. I don't feel like redoing my channel.