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Federal Reserve Interest Rate Odds Shift As US Dollar Index Sits On Key Support – Mike Swanson (10/21/2019)

We are going to get a rate cut next week before this month ends. Some doubted that a few weeks ago, but the odds of an other Federal Reserve interest rate cut for the end of this month have rapidly shifted in the past week in the Fed Fund Futures market. A week ago they were at 67% and a week before that they were just over 50%. Now they are over 91%.

This shows that the cycle of economic expansion peaked out months ago. Weak economic data such as poor retail sales numbers last week and recent declines in industrial production are no doubt increasing the odds of another rate cut.

At the same time the US dollar index has dropped this month and is now testing support on its 200-day moving average.

The key support level on the US dollar index is now below $97 on the lower blue support trendline I have drawn on this chart. It may bounce off of it again, but it appears destined to break that level in the future. That will spell the complete end of the rally on the US dollar index that began in the spring of 2018 and spark the next big run in gold and silver. So get ready.

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