Why Traders Need to Pay Attention to the U.S. Dollar

[Trading With Larry Benedict]( Why Traders Need to Pay Attention to the U.S. Dollar By Larry Benedict, editor, Trading With Larry Benedict Many traders ignore the currency market. They find it confusing… They’re not sure how it all works or what drives the underlying market. But that’s a mistake. Currencies are the biggest market in the world, and they offer one of the most active and profitable spaces for traders to explore. And a good place to start when you’re new to forex (FX) is the U.S. dollar. Rather than buying shares of Apple (AAPL) or Microsoft (MSFT), you can speculate on the movements of the dollar versus other currencies. So if you thought the euro was going to strengthen against the U.S. dollar, for example, you could trade an ETF like the Invesco CurrencyShares Euro Trust ETF (FXE). Recommended Link [“You need at least $100 of this asset – and it’s NOT gold” – Dr. Nomi Prins]( [image]( $100 is all you need… Former Goldman Sachs managing director Dr. Nomi Prins has identified an investment she’s calling ‘the world’s hardest asset’ – and she’s recommending it to friends, family, and followers. She’s talked about it on podcasts… live TV… and in her newest, bestselling book, Permanent Distortion. Dr. Prins says: “This asset has nothing to do with gold or silver, but it has many of the same features to protect your wealth – and preserve your privacy.” As the turbulence in our world grows worse and worse… [Click here now to see what Nomi is recommending before it’s too late.]( -- Major Trends There have been some clear long-term trends in FXE. From 2019 through early 2020, FXE steadily fell. That meant that the euro was weakening against the U.S. dollar. But around April 2020 that all changed: Invesco CurrencyShares Euro Trust ETF (FXE) – Weekly Chart [chart] Source: e-Signal When the Fed started cutting rates quickly in response to the pandemic, the euro rallied strongly against the U.S. dollar. FXE’s up move coincided with two bullish technical signals… - The Relative Strength Index (RSI) broke through resistance (green line) and tracked in its upper range. - The 10-week moving average (MA, red line) crossed above the 50-week MA (blue line) and started to accelerate higher. However, after peaking in early 2021 (‘A’), FXE rolled over as momentum waned. As the chart shows (red line), the RSI steadily dropped into its bottom half, dragging FXE lower too. That fall sped up when the Fed abandoned its near-zero interest rate policy and began to quickly tighten rates. As we saw when we [checked it out in April]( (red arrow), FXE lost 24% by the time its 18-month downtrend bottomed out in September last year (‘B’). Take another look: Invesco CurrencyShares Euro Trust ETF (FXE) – Weekly Chart [chart] Source: e-Signal But like any other market, FX also overshoots… With the RSI rallying out of oversold territory (lower grey dashed line), FXE’s downtrend reversed. FXE’s emerging rally began with the RSI breaking into its upper band and the 10-week MA crossing above the 50-week MA. That strong move saw FXE recently trading at its highest level since February 2022. But that rally is about to test a key level. So what am I looking for around here? Free Trading Resources Have you checked out Larry's free trading resources on his website? It contains a full trading glossary to help kickstart your trading career – at zero cost to you. Just [click here]( to check it out. Bounced Off Support You can see on the chart that FXE has made a series of higher highs this year at ‘1,’ ‘2,’ and ‘3.’ FXE retraced from each of those peaks when the RSI formed an inverse ‘V’ and reversed from overbought territory (orange circles). But that reversal in momentum was unable to penetrate through support (green line). Instead, in February and late May, the RSI bounced off that support level, sending FXE back higher. As the chart shows, the RSI is retesting that same support level for a third time (orange arrow). If the RSI holds that level and bounces higher, FXE will also likely break higher. The next test for FXE’s uptrend is to make a new higher high at what will become ‘4.’ Regards, Larry Benedict Editor, Trading With Larry Benedict P.S. The euro is currently rallying against the U.S. dollar, but that’s not the only pressure the U.S. dollar is under. An even bigger factor is unfolding that could ultimately dethrone the dollar’s reserve status… Tomorrow, August 22, Brazil, Russia, India, China, and South Africa (the so-called BRICS) are meeting to discuss how to bypass the U.S. dollar. And that has major ramifications for global trade – and the overall strength of the U.S. economy too. Yet if you’re prepared for this shift, you can not only protect your hard-earned money… but grow it over the coming year. I recently shared all about this situation at a special summit. So if you’d like to find out how to trade what’s coming, then [please click here to learn more](. IN CASE YOU MISSED IT… [Prediction: You Could Come Out Wealthier Than Ever]( The world’s most trusted cryptocurrency analyst, Teeka Tiwari, is predicting that the government will soon have complete control over your money. Those who fail to spot when the government makes their move could lose their entire life savings… But Teeka has another prediction… He predicts he could help you come out of it - wealthier than you ever thought possible. [Teeka wants to give you the chance to profit from the government’s plans right here…]( [image]( [The Opportunistic Trader]( The Opportunistic Trader 55 NE 5th Avenue, Delray Beach, FL 33483 [www.opportunistictrader.com]( To ensure our emails continue reaching your inbox, please [add our email address]( to your address book. This editorial email containing advertisements was sent to {EMAIL} because you subscribed to this service. To stop receiving these emails, click [here](. The Opportunistic Trader welcomes your feedback and questions. But please note: The law prohibits us from giving personalized advice. To contact Customer Service, call toll free Domestic/International: 1-888-208-6550, Mon–Fri, 9am–5pm ET, or email us [here](mailto:feedback@opportunistictrader.com). © 2023 Omnia Research, LLC. All rights reserved. Any reproduction, copying, or redistribution of our content, in whole or in part, is prohibited without written permission from Omnia Research, LLC. [Privacy Policy]( | [Terms of Use](