Benzinga - by Zaheer Anwari, Benzinga Contributor.
- The US dollar has achieved an 11-month high, with a notable 2.80% rise this year and a 7.20% increase since July 2023.
- As the dollar continues its ascent, gold, traditionally a safe-haven asset, is experiencing a decline.
The currency has seen a 2.80% rise thus far this year and a 7.20% ascent since its July 2023 low, setting a new milestone.
To truly grasp the current state of the dollar, it's crucial to understand its rocky ride over the past few years.
Since 2015, the dollar has been on a trajectory marked by unpredictability and twists.
Starting from March of that year, the dollar embarked on a period of consolidation, being confined within a range.
For the dollar, this range was defined by support at $88 and resistance at $103.
During the consolidation phase, the dollar's price fluctuated between these two levels, with neither bulls nor bears gaining an advantage.
However, in June 2022, the equilibrium was disrupted. The dollar soared, surpassing the resistance level and achieving a 10% increase.
Yet, this triumph was short-lived. After peaking at $114, the currency swiftly plummeted, retracing back into its familiar consolidation zone.
July 2023 marked a crucial turning point for the dollar. Initially, the currency briefly fell under the $100 threshold, but this setback was short-lived.
The $100 level, which has significant psychological significance, served as a launching pad, pushing the dollar higher.
This upward trend was strengthened by the daily 20-period moving average, which acted as a support and propelled the price higher.
The dollar's trajectory closely mirrored this average, suggesting a consistent and steady rise.
The price has now soared past its previous high of $105 in March 2023, reaching new heights by the end of September 2023.
Once a peak, this level now acts as a strong support, offering hope for investors.
With the currency consistently forming higher highs and higher lows, the dollar's upward trajectory seems poised to persist.
The September 2022 high of $114 is the next major milestone for the dollar. It's a significant level that acts as a major resistance point.
Investors are eagerly observing to see if the currency can break through this barrier.
As the dollar grows stronger, the popular safe-haven asset, gold, is taking a hit and could spell more trouble for gold.
After the closing bell on Wednesday, October 4, the stock closed at $106.53, trading down by 0.17%.
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