When you stop and think about it, it’s really quite amazing that you can walk into a store, hand someone a particular piece of paper, and walk away with some sort of good or service.
Another incredible fact is that the value of that paper currency is constantly fluctuating, and there’s plenty of money to be made from those swings.
So, where is the value of the U.S. Dollar heading right now?
There seem to be some mixed views on the value of the dollar right now. And to help me explain where it was, is, and will be, I want to show you the chart for an exchange-traded fund called the PowerShares DB US Dollar Index Bullish Fund (UUP) from Stockcharts.com:
The UUP is a bullish fund, so it goes up as the value of the dollar rises. This is the long-term chart, so we can see that the dollar’s ascent began all the way back in July of 2014 when it was near $21.50.
At the beginning of March, that price of UUP peaked at $26.50, which was a gain of 23% in that time.
Since March, however, the UUP reflected a falling value for the dollar as it fell back down to a recent low of $24.50.
Where is it headed now?
There are 2 things to look at here.
The first is that investors are flocking to gold and silver, which shows a very bearish sentiment toward the U.S. Dollar. And those are confident feelings—the trend in the options market is to “roll up” bullish gold and silver positions, which indicates the belief in a longer-term gold and silver rally rather than a temporary one.
But the second thing to look at is the short-term chart for UUP, which gives us 2 distinct indicators to base any theories on:
Right at $24.50, I can see a clear line of support. That’s where the dollar, according to the bullish UUP fund, was unable to drop below.
But above the current price for UUP, we can see the trend line, which his clearly pointing downward.
So what can we take from this?
The predictable thing for the price of UUP to do for the immediate future is fluctuate in between the two lines, but as you can tell, the descending trend line will intersect the support line at some point.
Assuming that the lines aren’t broken before they intersect, that will be the point when we learn exactly which way the dollar is headed for the foreseeable future in a big way.
When that happens, the correct investment could net you a huge prize either way.
And that’s where Code Breaker comes in…
