NFTRH+; there’s the breakout…

Uncle Buck is making a definitive breakout above resistance after previously holding the neckline to the Inverted H&S. Daily RSI and MACD are aligned for higher levels as well.

In a sense it continues to be USD (and the also firm Gold/Silver ratio) vs. long-term yields and inflation expectations. It’s an epic battle and speaking personally, something of a mental whipsaw. Recall that these two have stood as caveats (along with the Canadian TSX-V index) against what has looked like a re-engaging inflation trade.

USD (DXY) Target #1 appears upcoming in the mid-94s. If we get a solid disinflationary whiff or continued broad market correction 96 could be next. On the bigger picture I think this process continues to look like a lever; a lever that the Fed will one day pull by going dovish again against the anxiety of a faltering macro. But that is getting ahead of ourselves. It’s a complicated macro and I am taking it week to week.

Side note: USD was firm with rising yields, which are technically supportive for the currency, and it is firm with weaker yields, which could be a sign of systemic stress (and a bid for liquidity by casino patrons). In other words, USD has been due to rally and as of now, rallying it is. If the GSR continues to attend it the risk ‘on’ and reflationary markets are not out of the woods.

dxy