Real rate charts higher trough, this is bullish for the USDOLLAR



The top chart shows the daily real rate, with FXCM’s USDOLLAR basket underneath and their correlation coefficient (cc) at the bottom. Yesterday’s real rate candlestick closed above a reference candle’s high (black sideways arrow). This price action suggests a potential higher trough (top red arrow), which lays a platform for the next impulse move up.

The cc is a meaningful 87 on the daily chart. As such, if the real rate has charted a higher trough, we would expect dollar strength to follow. As such, we are monitoring the green sideways arrow – if the price closes above, the greenback may also have charted its higher trough. This will be bullish, creating a potential foundation for USDOLLAR‘s next upswing.


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