This is the standard weekly chart of the USD index and USD vs. other currencies reviewed each week in NFTRH. We also use a daily version to tighten the focus on all of these. But the weekly’s message has been that the US dollar index has been intact to a series of higher highs and higher lows despite its bearish intermediate trend. In other words, the long-term picture dating back to 2011 has remained in a bullish trend.
To be sure, Uncle Buck really got put under pressure vs. the Euro but there too, a lower low was not made and support has held.
Now, if Unc saddles up and rides with the Gold/Silver ratio (GSR) some pain could be brought across financial markets (GSR is a liquidity constraint and thereby risk ‘off’ indicator), especially those that had been anti-USD. In a post on Monday we asked if everyone should get out of the pool because of the GSR’s pop.
Here are the 2 Horsemen, with Rider #1 settling to well defined support and Rider #2 above its key support as well. I am currently only timidly short US stocks (while also being timidly long) and also short Emerging markets due to their upside target acquisition but more than that, their anti-USD characteristic, as noted in an NFTRH+ update (now unlocked) last week. It’s also worth noting that the Macro Tourist has gone over to the dark side for a bunch of reasons cited here.
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