I would have been better for the dollar had it never rallied, but instead flatlined like a broken tech stock between .7000 and .7500 for the past 12 months. That ferocious rally did nothing more than create enough energy now to potentially bust it through the .7000 level.
I expect a major battle at .7000. I expect a short, sharp dollar rally that lasts maybe 4-8 weeks and gets the crowd very juiced that the "long awaited dollar rally is finally here." I could see that rally starting in January from the .7000 level, and taking us up to .78/.79. I expect gold to stall during that rally.
Then the next leg will start down, into new lows by late Q2 2010.
Here is a post of mine from 360 days ago, just 5 days shy of a full year:
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