The US dollar is on a counter-trend rally, rampaging against asset market speculators
And for the sake of any further rally (our plan was for Q4-Q1, and we’re sure well into Q1) it had better be a counter-trend rally in USD or the bear market – still intact as it is – will resume.
I am speculating a bit in a couple Goldilocks (i.e. potentially favor, or at least not directly impaired by a stronger dollar) items, but those trades could be broken with more market weakness (broad market rally, haggard though it is, is not broken yet).
Here is USD (DXY) in pre-market. The target we have been planning in NFTRH is the junction of the 38% Fib retrace (106.17) and the 200 day moving average (106.47).
USD has potentially entered a cyclical bear market back in September. But that does not break its “anti” correlation to the world of assets. As a side note, if the Fed’s forced hawking resolves into an outright deflation scare, you just watch how intensely the “death of the dollar!” (DoD) cult eats itself some dollars as it flies out of all the commodities, resources and maybe even precious metals* it is touting.
* I say “maybe” because theoretically, the things (the elements of counter-cyclicality) that would drive USD up are also the things that would see gold relatively stable and very much aid gold mining fundamentals. But most people don’t want to hear that. They want to hear “inflation” and the issue in the gold sector would be in the form of a question; how many inflation bugs are left to sell?”
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