The dollar has done an excellent job the past few years confounding traders and analysts, turning up when sharp sell-offs rock the market and declining when most traders see clear skies.
The pattern analyzed here indicates weakness only on a shorter to intermediate-term horizon, and it certainly cannot account for extra-market events or surprise interest-rate moves by the Fed. Keep an eye on the week of Dec. 4-8: A move back above the previous week’s high could mean the recent sell off is destined to be a short-term anomaly.
In the meantime, though, the move could have the potential to bring back some needed volatility and direction to currencies.
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