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Raoul Pal @RaoulGMI
, 9 tweets, 3 min read Read on Twitter
A few Sunday morning charts to make you step back a look at exactly how critical things are getting for the Dollar bull market... This is going to dictate the macro narrative for the next 6 months, which ever way is plays out. For me, I think the $ goes much higher, faster.
Exhibit A - The Fed Broad Trade Weighted Dollar Index has formed a huge cup and handle formation. The acceleration phase is close...
Exhibit B - $CNY The Chinese currency will move through 7.00 if the next round of trade wars occur. It will not necessarily be driven by China moving the rate but by the basket moving, thus repricing $CNY.
Exhibit C - The ADXY, Asian currency Index, is forming a very clear and very large head and shoulders, suggesting that the move could be MUCH larger than anyone expects...
Exhibit D - And the Aussie dollar confirms that potential. The Aussie has been the leader in major currencies and it has just broken key support...
Exhibit E - And the Euro is repeating the big 1990's pattern and may well eventually break the giant trend line, which gives much lower targets than my own 0.8 long-standing forecast.
Now, remember, these charts are all monthly charts. There is plenty of room for wiggles on the way, as the market swings from over positioning, back to more reasonable positioning. But the one thing Ive learned from trading FX for 30 yrs is that when it trends, it really trends..
I just use charts here as they effectively tell the story in a Twitter format, but for me a chart doesn't stand alone. It needs to be supported by deep research into the fundamental drivers, which backs this all up. Again, nothing is certain, but its highly probable.
If you are interested in all of this, I did a presentation recently called "Macro is Back" on this on @realvision , which in turn was based from my work in The Global Macro Investor, my flagship research service, along with Macro Insiders, my retail research service.
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