The US Dollar has experienced a decline over the past 13-months that hasn’t happened many times in the past 10-years. Below looks at King Dollar’s performance over the past 13-months (upper left) at (1), reflecting that it has declined nearly 13% in that time frame. This large of a decline has taken place just three times in the past 10-years. The rare decline understandably has driven bullish sentiment down (20% bulls), levels seen only three times in the past decade at (2). Source; from Sentimentrader.com.

The upper left chart above highlights that King Dollar has declined this large of a percent (13% in 13-months) at (1). In the past, this large of a decline in a little over a year has found the US$ closer to a low than a high. The same story can be said about sentiment.

Below looks at the US$ over the past 28-years-

No doubt the intermediate trend in the US$ is now lower, due to the 13% decline in 56-weeks. The large decline now has it testing a potential support cluster at (1).

With this support test in play and US$ bulls hard to find, this price zone creates a price point where the out of favor US$ could start an “out of favor counter-trend rally.”

If a short-term counter-trend rally would happen to start taking place at (1), it would put some downward pressure on the metals sector, which is testing key falling resistance lines at this time.