The US dollar (DXY) continues to target 98
In Q1 2021 USD bottomed amid the usual suspects proclaiming “dollar collapse!” and “death of the dollar!” and inflation as far as the eye can see. Zero Hedge led the charge.
As the inflation trades labored into the spring USD formed a neckline (black dashed), dropped for an interim (at least) last hurrah by the inflation boosters, put in the right side shoulder and with a lot of grinding both ways (for and against inflation traders), set about the upside targets we established for it in late spring/early summer based on the bottoming pattern.
It was no smooth ride for the pro-USD view, let me tell you. Look at how Unc buzzed and ground away at the neckline before finally taking it out, establishing support at a new recovery high and then hitting target #1 around 94.50.
Now, I get it. USD is the best (due to its reserve status) of a bad bunch. But price is price and ideology is bias. Anyway, target #2 was taken more recently and now Unc looks to the 98 area, which is the pattern’s rough measurement and a 62% Fibonacci retrace level.
Moral of the story?
These are the financial markets, they are not an idealist utopia. In Utopian finance all would be just and right. It would not be rigged, manipulated and influenced by little more than confidence and ignorance (which I think are the actual fundamentals of the current Keynesian financial system, where debt can be created, manipulated and used to desired ends as long as a largely ignorant public allows it to go on). It’s systematic now and trying to call an end to that system means you think you can remain solvent fighting it longer than it will take to expire.
In Utopian finance gold (or some other finite asset/object) would be used to ground an honest system. But as I’ve repeated over the years, I don’t see this as anything remotely resembling Utopia. I see it as war or at least, survival. You need to survive (and even thrive against) the manipulations of the [insert your own gold bug rhetoric here] masters, banksters, cabal, evil left wing commies… and please don’t politicize it. In short, you can create your own little personal Utopia by understand monetary value (gold) and understand the times that ‘value’ may be leveraged as a ‘play’.
The current Democrat regime would like to go full frontal inflated Keynesian but the last president, a supposed Republican, was just as bad, actually badgering the Fed to inflate more (by creating more debt) as the bond market was already about to blow a gasket. We knew the cynical Fed would do no such thing. We in fact knew that the Fed was not going to incinerate itself in such an environment.
Circling back to Uncle Buck, it’s a piece of paper and/or it is digital entries. As to the debt it lugs around, how many zeros do you want to add to the number? As long as confidence and ignorance are in play the number is theoretically limitless. So tell me when confidence will run and a revolutionary mindset will hold sway out (and I don’t mean Trumpism, which couldn’t tell sound finance from Ponzi finance) and I’ll tell you when it might be profitable to fight the system. Aside from that, we ride the system as it waxes and wanes; as confidence waxes and wanes with our “masters” at the controls.
Thus ends what started as a USD update post and ended up as a brain dump.
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