The US-Dollar Index has surged over the past several weeks because the US Dollar has appreciated against most of the other major global currencies.
The US-Dollar Index is a basket of the six major world currencies, which are weighted against the US Dollar. The monthly continuation chart of the US-Dollar Index below shows that price action has been in an uptrend for the better part of the last four years, and it is currently approaching the highs from back in 2009-2010, which is around the 89-90 area.
Look for the index to pause around this level with the possibility of an additional spike into 2004-2006 highs at 92.45. This consolidation is likely to last a number of weeks, as would be expected when reaching any key level of support or resistance. A continuation of bullish price action in the US-Dollar Index should keep commodity prices at bay and could limit the near-term upside for US stocks.
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