What to Watch with the Crashing Dollar

As noted back on August 1:

We're looking for the dollar index to touch 90 sometime in the next couple months
92.71 last.
Which raises the question: If oil can only hold its own in the face of a falling buck what would it do if the dollar was rising?
Ditto for gold....

And on August 30:

We're still looking for 90 on the DXY but  the last 26 hours have not furthered the cause.
92.55 up 0.37 last.... 

Which leaves us a bit over three weeks to fulfill the prophecy.
91.26 down .38 on the index after touching 91 earlier today.

Enough with the perils of prognostication, here's the headline story from Dragonfly Capital:

Google “Crashing Dollar …” and the first 3 selections for the next 4 characters in auto-finish setting are 2014, 2015 and 2016. That is bizarre as the US Dollar Index was flat for most of 2014 until it started to rise in July. that continued through the rest of the year and into early 2015. And 2015 and 2016 then saw the Dollar Index move sideways in a channel. Look for yourself on the chart below. Yet another example of why you should follow price action, not predict it.

If there was ever a crash scenario in the US Dollar Index it could be happening right now! Since the December peak the Dollar Index is off nearly 12%. Not quite a crash, but a big move for something that historically has pretty low volatility. And the Index has passed through some major milestones. So what is next if the breakdown continues? Lets take a look.

Three weeks ago the Dollar Index broke below the 2 year channel that began at the start of 2015. It had dropped below and then reversed before so not really a big deal. And it did stop then at its 200 week SMA. That week was followed by a Spinning Top candle the following week still right at the 200 week SMA. This is a candle of indecision and often though of as a reversal candle. To confirm a reversal though the next week candle (closing today) would need to close higher.

It will not. With one trading day left this candle looks to be making a new 2 year low. This suggests that we look for possible support areas as it continues lower....MORE