Chart of the Day - Friday, May 12, 2023

Today’s Chart of the Day was shared by Shane Murphy (@murphycharts). The US Dollar Index ($DXY) is back in the spotlight after having its best week since it peaked in September. Shane points out that it's back above its 50-day moving average, which has been a good proxy for the intermediate-term trend. It has also formed a bullish momentum divergence, with RSI failing to reach oversold conditions (below 30). If the Dollar continues higher, it will likely put pressure on risk assets like Stocks, Gold, and Crypto. Keep an eye on $103 and $105 over the next few weeks. $103 is an important long-term level as it represents the 2016/2020 highs, while $105 has been a key inflection point more recently.