It’s as simple as that which was ‘anti’ when the inflation/reflation party was ripping is still ‘anti’ when the party is over (at least temporarily). When markets liquidate – to mini or maxi degree – liquidity awaits in the form of the reserve currency. Markets have not cracked (get a load of big Tech bubbling to new highs) but signs of weakening are all around. Similarly, USD has not broken out, but it remains constructive.
USD (DXY) is still poking at the neckline of the inverted H&S we reviewed in NFTRH 662. If it breaks through, we can expect more pressure across asset markets, including in gold (after the bounce plays out) because most gold bugs are also inflation bugs.
If USD takes out the neckline our objectives are the 38% Fib around 94.50 and if a broad market correction takes hold and bites deep, the H&S measurement to 98 or the 62% Fib at 97.72. Objective #1 is the one to manage for now.