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The Best Ways To Short the Dollar (Plus 2 New Stock Picks)

Mark Shawzin
April 21, 2021

I believe the US dollar is setting up for a major move.

To make my reasoning for this hypothesis more clear, I want to take a long-term global view of what’s happening on the long-term chart. 

Here’s the 50-year chart of USDI (the US Dollar Index):

Despite the major peaks and valleys on display, USDI has been heading lower over time. The Index has been tracing out a long-term descending triangle (essentially a sawtooth pattern). 

During the course of creating this sawtooth, there have been monster moves higher including a huge surge in the late 1970s, another in the late 1990s, and then another from 2010 to 2020.

But every surge was met with a selloff. I believe we’re looking at another of those long-term selloffs right now.

More on that in a moment …

What you'll also notice in this long-term chart is that when USDI moves in one direction or another, it does so for many years. Many of the moves on this chart are 10 years long.

Given that history, it's very easy to believe we may be just a few years into a decade-long selloff in USDI. So despite the fact that USDI has already descended from its recent highs, there’s a lot more room to run within the cadence of the long-term downtrend.

In fact, USDI only just traced out a double top price pattern. And right now it’s sitting at the neckline of that pattern.

A retest of that neckline would imply another move lower. And while USDI did rise off a support level recently, I feel that little run is now exhausted. I think we can now anticipate another down move in the dollar.

Now of course we want to be able to profit from this as traders, and that means selecting the best dollar correlated trading pairs.

One currency I think will rise substantially against the US dollar is the Australian dollar (AUDUSD):

For the last few months, AUDUSD has been trading within the confines of an inverted head and shoulders price pattern.

The right shoulder sits above the left shoulder. And so the neckline slopes up across the entirety of the pattern.

The implications of this inverted head and shoulders and sloping neckline are that not only should AUDUSD go higher, but substantially higher and relatively quickly too.

Right now AUDUSD is once again right at the neckline of that inverted head and shoulders after a lot of backing and filling within a tight trading range (about 0.74 – 0.78). I anticipate AUDUSD is going to break out of this sooner rather than later.

So while there could still be further back and forth, patient traders with long AUDUSD positions should be rewarded before much longer.

Another pair that appears to be a no-brainer way to take advantage of a declining US dollar is USDCAD (US dollar versus Canadian dollar):

This is an upside-down version of AUDUSD where instead of an inverted head and shoulders, we see a right-side-up head and shoulders.

Once USDCAD crossed the neckline, it confirmed this bearish price pattern. Prices have in fact been trending lower since that time, within a tight channel.

There was a bearish key reversal last week where USDCAD tried to go higher, but instead closed on the low of the week. Now it looks like USDCAD is headed toward the lower boundaries of the channel.

I anticipate that it will take out recent major support at 1.22 – 1.23 and USDCAD should inevitably and inexorably keep going lower over time.

But perhaps the dollar-related pair that offers the most opportunity is USDJPY (US dollar versus the Japanese yen).

To find out more about the USDJPY watch this week’s full report.

I show you everything that really counts.

The highlights include:

  • Why it's not too late to short the US dollar (the secret's in this 50 year chart)
  • Why it's not too late to short the US dollar (the secret's in this 50 year chart)
  • Why I'm not in USDJPY yet... but soon will be
  • Is GBPNZD still a buy? I'm basing my answer on this specific price action
  • My current price target for gold even though I'm on the fence long-term (starts at 16:15)
  • This pattern's appeared for gold and the NASDAQ ... and now the S&P too (19:48)
  • Why I like Westrock as a buy and where to consider getting long
  • Yet another example of why you don't need the news to be a successful trader
  • How I made 500% and 550% on QS puts in about a week
  • Plus much more!

Choose a price that makes you happy, then access my Report right now -- before the clock strikes midnight:

Click here to take the next step

There’s no commitment and no minimum investment. Just ‘name your own price’ and start learning!