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Watchout the handle!!!We have a full house of markets; Euro still alone holding against the flow. NFP was a clear overshoot sending signals that hikes are beginning to weight heavier in equities. THE EASY PART OF THIS MOVE IS LONG GONE! Lets try to make this idea productive for all; extreme divergence between dollar and euro and just the pure chance of making that gap even wider unlocks rather dangerous levels in the euro both on a macro economic front and inflation. Capitulation time?
TVC:DXYShort
by TheBanker
5
After The Trump USD Rally, What's Next?Afternoon guys.. 2016 was a roller coast for markets. A year ago investors were in panic about deflation, indeed as the year progressed a good case inflation scenario unfolded. The market reaction following the US elections was even faster that expected. In real terms the USD is ~8% above its 20y average but still 8% below its high in 2002. Hedge funds are long the USD, real money remains short which is a relatively similar positioning in the last 12 months. Rate momentum has been especially negative for EUR. Meanwhile USD remains an asset with strong equities and the steepest rates trend, capturing the most hawkish monetary policy in G10. I remain bullish on the USD for the years ahead, there are short term risks such as the BoJ's credibility in easing monetary policy vs. the ECB. Alongside the contributions fiscal policy will play this year as a potential leader over monetary policy.
DLong
by TheBanker
9
DX: Dollar index long term uptrend continuesOdds are that we're seeing the resumption of the long term advance suggested by the 6-month and 2-month charts in the dollar. Right now, it's pending confirmation, which will materialize once price hits the 99,58 mark here. There are to logical targets for this rally, one 7.82 points higher, and the other at 116 give or take. If price manages to break above 116, it can go considerably higher, but it would take a massive fundamental catalyst to fuel this type of advance. I'm of the idea that we will get an interest rate hike in December, which could possibly manage to push the dollar high enough to trigger this brutal rally my 'divination' here shows. Good luck. Cheers, Ivan Labrie.
DLong
by IvanLabrie
2
EURUSD close to major pivot point at trendlineEURUSD is close to an important point at the resistance trendline. If it bounces off and down, we might see a down move to the lows of the daily chart support levels. If it bounces off the daily lows and heads back up, we will get wave 5 to the daily highs. If it breaks the support, the weekly chart would be a huge bear flag correction structure and we will get bigger downside. I will be taking a short if it bounces off the 4 hr resistance trendline, with stops a bit above it.
Short
by profprof
Time To Abandon Preconceptions on Gold and the Dollar?Historically, gold and the US dollar move inverse of each other. Time to abandon this preconception? The US dollar is going strong, but is it time to change the preconception that a strong US dollar is automatically bad for gold? Perhaps. The inverse relation has historically occurred, but in times of uncertainty, the inverse breaks and gold typically remains on top. BlackRock’s Russ Koesterich, CFA, gives the inverse relationship the benefit of the doubt in Market Realist’s “Why Gold and the Dollar Move in Opposite Directions.” Koesterich goes to say that a strong dollar is bad for gold because it makes the commodity more expensive – this is true in relation to gold priced in any currency. The article also points out to the assumption that the Federal Reserve “may” raise rates, which is also is positive for the dollar, bad for gold. Conversely, this is one of the reasons I believe the Fed won’t raise rates. Deflationary pressures will continue to raise, and that is opposite of the Fed’s intentions. Under normal circumstances, the inverse relationship of the two make sense. However, this is a time in history not seen before. Central banks are omnipotent, and their modus operandi is currency debasement. Gold priced in euros just reached a 21-month high, following the European Central Bank’s quantitative easing announcement; and gold priced in yen has been an amazing trade during the Bank of Japan’s kamikaze monetary policies. But, the dollar is rising, not falling, right? True. The question is not why gold should fall given the strong dollar. The real question is “why is gold not falling given a strong dollar?” It’s simple: gold is a central bank hedge. The ultimate currency hedge. Furthermore, the performance of the dollar – although not new – is not normal. Up over 20 percent since the parabolic move first began, these moves are often foreshadowing destruction of capital which quickly follows. In “US Dollar Rally: The Beginning of the End,” I outlined three previous times the dollar rose by at least 20 percent: 1988-89, 1999-2001 and 2007-9. Each move was followed by double-digit declines of at least 16 percent in the US dollar index. In addition, the last two descents took equities down with it – the “tech bubble” and the “Great Recession.” Omens are lurking as the dollar and gold relationship is mirroring that of 2008. In the above mentioned article, Koesterich presented a graph showing gold and the dollar. Notice January’s decoupling of the US dollar mirrors that in January 2010, following the Fed’s implementation of quantitative easing. So, is more easing from the Fed coming? Likely, and it’s more likely than a meaningful rate hike by the Fed. Gold rose significantly in the dollar collapse in 2000-01 and 2007-09. During the Great Recession, gold was further boosted by the Fed’s ill-fated QE attempts. You do not need inflation for strong gold gains, you just need central banks to remain in business. It is important to rethink common ideologies on investing because markets are dynamic and ever-changing. This is why both fund managers and retail traders are slaughtered in epic market collapses. They fail to evolve along with financial markets, continuously trying to fit the round peg in a square hole with the square peg in plain site. bullion.directory Link to "US Dollar Rally: The Beginning of the End" bullion.directory
INDEX:DXYShort
by CommoditiesTrader
28
UUP Monthly - Major moving average confluence for $DX_F ETFMonthly chart for the US Dollar index ETF is currently about to have a major crossover of the 10/20/50 MONTH moving averages. Currently they are basically on top of each other at the $22 level. Price is riding the upper monthly Bollinger Band and the bands are flaring away from each other which shows the strength in the move and tells of expanding volatility. The presumption shown from this chart is that the US Dollar will continue to show long term strength and until proven otherwise should be played from the long side against other currencies.
AMEX:UUPLong
by MaxxPayme
2
Euro completed major measured move and reacted to major TL test.Natural area for the EURUSD to consolidate and digest the recent major down move. H/S target achieved at 1.30158 and price bounced off major down trend line that has defined pivot areas of supply and demand since 2013 (dotted black line - see shaded circles for times that price has pivoted off of this line. Would not be surprised to see a counter trend covering rally develop soon to squeeze late to the party short sellers. Look to reset short sales at 1.3015 and ideally 1.32-1.3250 range
by MaxxPayme