Download - USD Further to Fall
8/6/2019 USD Further to Fall
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USD:FurthertoFall
IstheUSdollarpoisedtobottomoutagainsttheworld’scurrencies,ordoesithavefurthertofall?The
chartstellall:
TheUSdollarhasrecentlyfinished“wave1”ofitsbearishsupercycleagainsttheeuro.Havingcompleted
“waveA”ofitsthree-wavecorrectionandmakingprogresson“waveB,”itisnotsurprisingthatmanyUSD
bullsthinkthatthegreenbackhasroomtorise.Lookingmoreclosely,though,itisclearthat“wave4”of
the“1”supercyclefailedtoactasasafeguardsupport,butratheritwasseenasacliff.Tobreakthe1.4200
levelwithconvictionwouldmeanafreefallfortheeuro,andthatwasnotgoingtohappen.Reboundbelow
thefailedsupportlevelindicatesthattheeurohasfarthertogainontheupsideagainstthedollar,backed
bytheStreet’sacquiescentacceptanceofahornyheadoftheECBandGreekdebtproblemscomingtoa
head.Thecrosshaspotentialtorisebackupto1.4600.Oncethemomentumturnsandabreakbelowthe1.41/1.4000levelisseen,nextsupportisseenatthe1.3450level.
8/6/2019 USD Further to Fall
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TheSwissfrancappearstobepoisedtosetfreshhighsagainstthegreenback.Havingrecentlystarted
“wave5”ofthegranderbearish“A”supercycle,thecrossappearstobeadheringverynicelyto
support/resistancelevels.Failuretobroachthe0.90levelmeansthatthecrossislikelytocontinuedownwardandbreakbelowthe0.8600tosetayearlylow(support)forthecross.
IamsellingtheUSdollaragainstmajorcurrencypairs,includingcommoditycurrencies.Gold,silver,crude
copper,andpalladium(amongothers)poppedtodayoffofavolatilityspike,indicatingfurtherupsidefor
commodities.ThatmeansnotonlygainsfortheAustraliadollar,Canadiandollar,andNorwegiankrone,
butalsothatthegoodolegreenbackwillfacefurtherdevaluationinthefaceofcommodityinflation
concerns.
Marketsseemtobeshruggingoffeurodebtissues,andIdonotseeabottomfortheUSDuntilwellintothe
summer.Long-termdollarstrength(higheryields)willonlycomeintheformofpositiveUS
unemploymentandhousingdata.Untilthen,watchtreasuryyieldscontinuetofall,commoditiestogain
modestly,volatile(turnedbullish)equitytrading(retailers,technology,financials),andadepreciatedUSdollar.Targeta1.45/1.46levelforaturnaroundagainsttheeuro.
njb