Dollar Framework

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The dollar peaked on day 7 and formed a swing high today, day 8. Our framework calls for the dollar to continue lower into a yearly cycle low.

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Buyers stepped in to defend the 80.30 level causing the dollar to close up off the low of the day. The dollar needs to deliver more downside follow through to confirm the daily cycle is in decline. A break below the trend line should do it.

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Meanwhile stocks continued higher. Stocks have now gained over 3% since the lows on Wednesday and are getting a little overheated. Stocks may need to pause soon to catch its breath. But I doubt that we will see that occur this week.

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