Turbulence ahead

There is likely some turbulence coming in the weeks ahead and if it indeed materializes, its impact can be quite broad!

I'm talking about the king of currency, the US dollar. US$ has a rough path in the past two months, after touching a recent high around 93 back in Apr. Since then it has lost about 3% in about 6 weeks. Sounds like nothing, right? Well, in the currency world, this is a lot of move, especially for a major currency like US$ in such a short time period. But right now, US$ is showing a short term bottoming sign based on its TA. The last time the dollar chart showed a similar setup was at the start of the year. The buck rallied about 2% over the next month. We may very likely see a similar kind of rally for the US$ in the next few weeks. If it does, guess what its rally will lead to? You can bet the stock market will not fare too well for a strengthening dollar but more impact will likely be felt in gold, silver, and many commodities! I bet commodities in general will have a tough few weeks ahead. 

Having said that, a short-term bounce in the dollar won't change its longer-term trajectory. The bigger picture remains bearish. The Dollar Index is likely to be much lower several months from now. But for the near term, I'm betting for a bearish trend for gold/silver.