Here is an important update on the US dollar, silver and gold.

June 3 (King World News) – Naveen Nair at Citi:  The dollar retains a bias for a move lower at this stage as we test the key support at 97.92-98.98.

US Dollar Index
DXY (US Dollar Index) has tilted lower after testing the 55d MA in early May. As we had mentioned in an earlier note, the cross back lower in weekly slow stochastics breaks convictions for a further tactical rally and instead supports downside.

Adding to that picture is a bearish outside day on May 29. We are now testing a very important support level at 97.92-98.98 (April low and 61.8% Fibonacci).

Note that we still have not seen a weekly close below the latter level. IF we see this weekly break, it would reinforce ideas of a move lower in the dollar, with subsequent strong support only at 94.63-95.24 (2022 low, psychological level and 76.4% Fibonacci retracement).

Recall that our traders and strategists also slightly favour a softer dollar, details of which can be found in the note attached to this video. Market Positioning also tilts short dollar.

US Dollar/Canadian Dollar
USD/CAD is edging lower gradually. Bank of Canada this week will be the key catalyst, where our experts are forecasting a hold, though markets price in about 6bps of cuts.

In techs, we see room for a move lower in USDCAD should that tail risk of a cut be unwound, though note support at 1.3642 (Ascending support). IF we see a weekly close below that, then it would open the door to a move towards 1.3413-1.3420 (200w MA, September 2024 low). 

On the flipside, we see resistance at 1.3862 (May 29 high), followed by 1.3977 (55d MA).

King World News note: The US dollar is just another garbage fiat currency backed by nothing.  Regardless of where the dollar trades from here, trade in your fiat money and purchase physical silver.  Take advantage of the fact that silver is the cheapest hard asset on the planet.  Regarding the high-quality mining stocks, the upside breakouts continue, but the shares as a whole remain at one of the cheapest levels in history vs the price of gold.

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