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Thoughts on the Dollar:
$DXY formed a topping candle last week.
When global markets panicked in May (same concerns over hawkish Fed & Trade War), DXY barely moved.
Definitely doesn't help that $USDJPY and $USDCHF (combined 17.2% weight in DXY) are collapsing in risk-off.
$DXY formed a topping candle last week.
When global markets panicked in May (same concerns over hawkish Fed & Trade War), DXY barely moved.
Definitely doesn't help that $USDJPY and $USDCHF (combined 17.2% weight in DXY) are collapsing in risk-off.
Thoughts on the Dollar (continued):
$DXY daily sentiment hit 94 last week, among the highest in three decades (top 99.30%).
The majority of extreme high readings (particularly since 2000) led to a Dollar top, with the exception of late 2014.
$DXY daily sentiment hit 94 last week, among the highest in three decades (top 99.30%).
The majority of extreme high readings (particularly since 2000) led to a Dollar top, with the exception of late 2014.
...Further on $DXY, this rally is nothing like late 2014.
Since May 2018 this has been a labored, low-momentum advance littered with false breakouts.
Every sentiment spike led to chop for weeks/months.
Last week sentiment got high again and what happened… another reversal.
Since May 2018 this has been a labored, low-momentum advance littered with false breakouts.
Every sentiment spike led to chop for weeks/months.
Last week sentiment got high again and what happened… another reversal.
Finally on $DXY, see how the daily RSI tells the same story:
A rally that has *failed* to sustain any real momentum, rejected six times in a row since last year (dead money).
Next up, I'll talk about where the Dollar *IS* moving, and sharply: against EMFX.
A rally that has *failed* to sustain any real momentum, rejected six times in a row since last year (dead money).
Next up, I'll talk about where the Dollar *IS* moving, and sharply: against EMFX.
Thoughts on the Dollar (continued):
Although $DXY may be dead money (see prior tweets)... more broadly if we look at USDEMFX, things are very concerning.
These are *big* multi-week bases... some of these suggest potential for a *longer-term* move is increasing (higher USD).
Although $DXY may be dead money (see prior tweets)... more broadly if we look at USDEMFX, things are very concerning.
These are *big* multi-week bases... some of these suggest potential for a *longer-term* move is increasing (higher USD).
...Even $AUDUSD and $NZDUSD are under major threat.
I'm not calling for collapse but the potential for *long-term* chart damage is increasing.
Not shown, Weekly/Monthly momentum is firmly negative and until we see signs of stabilization, we can only guess how far this could go.
I'm not calling for collapse but the potential for *long-term* chart damage is increasing.
Not shown, Weekly/Monthly momentum is firmly negative and until we see signs of stabilization, we can only guess how far this could go.
Perhaps *the* most concerning FX chart (besides Chinese Yuan) is $USDKRW.
We can debate the blue base, which does look impractical!
But the red base is crystal clear, and price is stair-stepping higher since 2018.
Medium & Longer-term, this looks headed for a major breakout.
We can debate the blue base, which does look impractical!
But the red base is crystal clear, and price is stair-stepping higher since 2018.
Medium & Longer-term, this looks headed for a major breakout.
Dollar vs. EM (continued):
Four more charts with multi-week bases: $USDINR $USDCLP $USDCOP $USDPEN
Weekly/Monthly momentum is firmly in favor of the Dollar -- increasing the risk we'll see major LT breakouts and a big USDEM uptrend/extension.
Four more charts with multi-week bases: $USDINR $USDCLP $USDCOP $USDPEN
Weekly/Monthly momentum is firmly in favor of the Dollar -- increasing the risk we'll see major LT breakouts and a big USDEM uptrend/extension.
Dollar (continued).
Add $USDNOK and $USDSEK to the long list of concerns: major multi-week bases, Weekly/Monthly momentum firmly in favor of the Dollar.
Risk is increasing for major LT breakouts and a big Dollar uptrend/extension.
USDSEK alone would project to the 2001 highs.
Add $USDNOK and $USDSEK to the long list of concerns: major multi-week bases, Weekly/Monthly momentum firmly in favor of the Dollar.
Risk is increasing for major LT breakouts and a big Dollar uptrend/extension.
USDSEK alone would project to the 2001 highs.
