Last week I covered my World (ACWX) short due to the possibility that USD would break down through 94 (support) as opposed to up though 95 (resistance). Yesterday per the NFTRH Trade Log I added a couple of global markets. I have zero short positions (although a few individual hyped and bloated pigs in the US market are on watch) and am even open to taking a few other long positions in companies that either do well against a weakening USD or global areas that would do the same.
Daily USD does not look good, but is at the 94 support level.
If USD were to lose 94 an ‘anti-USD trade’ would be back on. Note the word “trade”; it is not called the ‘anti-USD investment‘ at this time. Indeed, men who stare at charts are already imagining an Inverted H&S from which USD will one day rise. But remember that many men who stare at charts (along with their female counterparts) want you to think they have magical powers that you do not have. They also have revisions for later. So this in itself is just a drawing that someone would make if they are already leaning in the dollar-bullish direction, longer-term.
But the monthly chart shows that the then-unexpected rally (by the majority, although we certainly expected it, nailing this tap of long-term support back in January) is coming from a major long-term support area. But there is more valid support down at 83-84 as well.
So with all the balls up in the air courtesy of the US-instigated global trade war (food fight) I for one am not going to try to chase around disparate inputs that are in motion and in whipsaw mode. I am not going to look for reasons and logical conclusions, macro fundamentally. I am just going to take what the indicators say and what the market gives.
Right now we are watching to see if it will give a temporary relief trade if USD pulls back.
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