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Chris Kimble asks the perennial "chicken or egg" question about the dollar and commodities and focuses his attention on the former.
Chris comments: The dollar has declined almost 10% in the past 60 days without much of a pause.
This Dollar decline/Euro rally has been a positive for stocks and commodities, for example Freeport-McMoRan (FCX) for Copper and Base Metals (DBB).
This decline has drawn the Dollar to two key price points: (1) its 50% retracement level and (2) a support/resistance zone in the 80-82 area that has led to reversals several times over the past decade.
With the Dollar declining without much of a pause and these key price points, odds favor a pause/bounce in the Dollar fairly soon.
Should the Dollar break below (1) and (2), the so-called "risk trade" money flowing to stocks and commodities would pick up momentum.
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