DXY reached our next downside target this morning as it continued to weaken relative to the euro and, intermittently, against the yen. Whether or not DXY holds these levels is critical to bonds, oil and gas and, by extension, equities. We’ve been bearish on DXY ever since a long-term TL broke down last April (over 8% ago.)
But, the path has been incredibly erratic, and the effects have been all over the map. As evidenced by USDJPY and VIX, the algos are struggling with the implications of a breakdown.I’ll pick up where I left off yesterday, with a discussion of two past patterns with potentially important bearing on the path forward: an analog.
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