The Dollar Index (DXY) continues to rally so a technical update seems like a good idea Tuesday. The rally in the DXY is having a negative impact on the commodity markets and hurting the emerging markets that are commodity sensitive.
We discussed the Dollar Index in our 2021 forecast piece from December 28 when we wrote, "The U.S. Dollar Index has been in a downtrend since making a peak in March...In this daily bar chart of the DXY we can see a bullish divergence from the 12-day price momentum study. Notice the higher lows from June to August to December. The pace of the decline has slowed. This bullish divergence can be foreshadowing a recovery rally."
Let's check these updated charts.