The US dollar index moved into a long-term uptrend at the end of July indicating the US Federal Open Market Committee could raise interest rates over the coming months.
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Fundamentally, the corn market looks to have the most fundamental reason to rally over the next year.
Join 200K+ Subscribers: Find out why the midday Barchart Brief newsletter is a must-read for thousands daily. Soybeans and wheat could continue to drift until reads on real fundamentals grow more bullish.
As I talked about last time, the US dollar index moved into an uptrend on its long-term monthly chart at the end of July. The implications of this, from a fundamental point of view, is that the US Federal Open Market Committee could raise the Fed fund rate over the coming months rather than making the cuts demand by the US president. Why? Based on my Market Rule #5, I don’t like to spend as much time as most others in the industry making up reasons for something, but in this case the picture is clear: Interest rates would go up to strengthen the dollar to fight the inflation that is all but inevitable when trade wars and tariffs are used as the primary form of “policy” (I use that term loosely to describe the current situation). Where did all this leave a handful of key investment markets at the end of July, from a technical point of view? Let’s take a look.
