Category: US Dollar
The analysis published under this category are as follows.
Thursday, July 29, 2021
USDX: More Sideways Trading Ahead? / Currencies / US Dollar
By: P_Radomski_CFA
The USDX reportedly invalidated its bullish H&S pattern yesterday, but did it actually do so? The line based on daily closing prices says otherwise.
Yesterday’s (Jul. 27) supposedly big news was the breakdown below the neck level of the inverse head-and-shoulders pattern in the USD Index. Invalidations of breakouts are bearish, and what’s bearish for the USDX is usually bullish for gold, silver, and mining stocks. So, what happened? And what didn’t happen?
Thursday, July 15, 2021
Will the U.S. Dollar Lose Momentum In the Second Half of 2021? / Currencies / US Dollar
By: Boris_Dzhingarov
As the world’s most traded currency, the US dollar has significant impacts on global trade. With interest rates at record lows and an uncertain macro-environment, it has risen at a stellar pace against major currencies in the last decade.
The US dollar is also the world’s most widely held currency, with an estimated $2 trillion in circulation. The strength of the greenback depends on a variety of factors, including economic and geopolitical stability, interest rates, inflation, and political influence.
It is important for investors and people who have exposure to the USD to understand how the dollar’s value could impact their wealth and future plans.
Friday, July 09, 2021
EURUSD Drops Below 1.20 As Dollar Shorts Are Trimmed / / US Dollar
By: S_N_Chatterjee
Activity is back in full swing in the forex market after the latest FED meeting, which has stirred all major currency pairs, including the EURUSD. Even though the pair has been trading up since the beginning of April, the order flow shifted towards the bearish side as interest rates are expected to rise as soon as 2022 in the US, due to a faster economic recovery and robust inflation figures.
A weakening US Dollar for the entire 2020 had been a supportive factor for the global economy, at a time when the recovery from the COVID-19 pandemic had started. However, experts at Axia Investments believe that reverse in Dollar weakness will have the opposite effect, acting as a tightening.
Wednesday, June 30, 2021
Will ‘Infrastructure’ Spending Collapse the U.S. Dollar? / Currencies / US Dollar
By: MoneyMetals
Recent collapses of bridges and a Florida condo building highlight what can go wrong when basic structural and foundational elements are neglected and allowed to deteriorate.
As corrosion and cracking spread, they may go little noticed at first, with repairs and upgrades put off. Meanwhile, the risks steadily build of a single point of failure leading to catastrophic consequences.
America’s deteriorating infrastructure is badly in need of fixing. On that issue, there is wide bipartisan agreement.
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Tuesday, June 15, 2021
USDX: The Cleanest Shirt Among the Dirty Laundry / Currencies / US Dollar
By: P_Radomski_CFA
The precious metals seem to be ready for vacation deep dives, but all signs indicate that the USDX will stay on the side of the pool, perfectly dry.
The USD Index (USDX)
With the USD Index washing away its sins in recent weeks, the greenback has recorded five daily rallies of more than 0.40% since May 26. And with the up days growing stronger and the down days growing weaker, the change in the trend will be clear to more and more traders, which eventually would likely cause a shift in the sentiment. Case in point: while gold, silver and mining stocks are looking forward to their summer vacations (deep dives seem to be in the vacation plans, especially given today’s pre-market ~$20 decline in gold) , the USD Index has been hard at work rehabbing its reputation. And with the U.S. dollar easily the cleanest shirt among the currency basket of dirty laundry, the smell of fresh linen has begun to pique investors’ interest.
Monday, May 24, 2021
US Dollar Breaks Below 90 – Continue To Confirm Depreciation Cycle Phase / Currencies / US Dollar
By: Chris_Vermeulen
If you’ve been following my recent research posts, you already know my research team and I are expecting some very big volatility and trends in the US and global markets over the next 12 to 48 months.
The US Dollar Index fell below a critical support level above 90 recently. This move lower after attempting to bottom in early 2021 suggests our broad Appreciation/Depreciation cycle phase research is continuing to play out. This means we should start to prepare for bigger trends, more volatility, and the potential for broad market price rotation over the next few years. You can read about our Appreciation/Depreciation cycle phase research entitled Long Term Gold/US Dollar Cycles Show Big Trends For Metals and Metals Rally Early In 2021.
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Saturday, May 22, 2021
DXY Weakness: Are You in A Crowded Commodities Trade? / Currencies / US Dollar
By: Submissions
Have you been long commodities like agriculture or oil? The US Dollar has continued to weaken, but is this trade getting a little long in the tooth?
Happy Hump Day, folks. Here are some quick facts: The US dollar has been in a steep downtrend since late March. The most recent CPI print in the US was a monster. The Fed has continued with the “lower for longer” theme. The Biden administration is looking to spend trillions upon trillions with no clear path for repayment, and it doesn’t seem to matter. Has the short dollar/long commodities trade gotten “too easy"?
The answer is yes, or at least most likely. Some steam will have to come out at some point. I’m not setting off any immediate alarm bells here and don't care to theorize on whether inflation is indeed transitory, as the Fed states. However, when a trade theme has that much going for it, for so long, in leveraged markets, it usually ends suddenly or at least experiences a snapback. Just some food for thought.
The US Dollar Index (DXY) can give us some clues.
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Saturday, May 01, 2021
US Dollar Index: Subtle Changes, Remarkable Outcomes / Currencies / US Dollar
By: P_Radomski_CFA
Even the smallest moves can be of utmost importance to a number of investors. This time, the USDX was the one to give a subtle nod to the upcoming changes.
In yesterday’s analysis , I wrote about the subtle, yet very important short-term detail that likely indicated a major turnaround in the USD Index. This is huge news for the precious metals investors, as a major turnaround in the USDX (and the subsequent rallies) would be very likely to translate into a severe price slide.
Monday, April 12, 2021
Rising Debt Means a Weaker US Dollar / Currencies / US Dollar
By: MoneyMetals
Americans appear to be growing more concerned about the skyrocketing national debt level – officially $28.1 trillion and counting.
The Peter G. Peterson Foundation’s monthly Fiscal Confidence Index recently shed five points, dropping to a level of 47, in the wake of the Biden Administration’s latest $2 trillion stimulus package.
That $2 trillion bill is simply piled on top of already massive budget deficits.
And it adds furthers to concerns over the country’s currency, the Federal Reserve Note “dollar.”
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Thursday, April 08, 2021
Stronger US Dollar Reacts To Global Market Concerns – Which ETFs Will Benefit? Part II / Currencies / US Dollar
By: Chris_Vermeulen
In this second part of our exploration of the recent US Dollar rally and what it may be reacting to in relation to the current US stock market highs and continued rally, we will explore some of the underlying factors that are translating into US Dollar strength while the US stock market continues to push higher.
In the first part of this research article, we highlighted the US Dollar reaction to the 2008-09 credit market crisis and how the US Dollar actually started to bottom/rally in early 2008 – just as the rollover top in the US stock markets continued to setup. The way the US Dollar reacts to stress factors in the global markets is to strengthen as a safe haven as capital is constantly seeking the best environment for investment and profits. When the markets enter a period of turmoil, the US Dollar typically begins to strengthen before the global markets really begin to react to the fear or turmoil.
The recent news of large financial institutions and hedge funds taking large losses and closing operations is somewhat similar to the Lehman event of 2008. These types of larger corporate debt collapses have wide-range global market effects. Sometimes, these events can ripple into other global corporations who engaged in this level of financing or credit functions. For example, Credit Suisse’s attempt to recoup potential losses from the Greensill collapse may be a very complicated and fruitless process according to a recent Wall Street Journal article.
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Thursday, April 08, 2021
Ladies and Gentlemen, Mr US Dollar is Back / Currencies / US Dollar
By: P_Radomski_CFA
Previously dismissed, the USDX may now be back with a vengeance. Sentiment is swinging away from shorts and there is an uncanny historical pattern.
With a potential bearish pattern already broken, the USDX is resuming its journey northward. And why is it geared to do well? Is it because the U.S. economy is ripping head? Definitely not - that’s not happening. It’s rather because other regions (think Europe and Japan) are doing even worse.
The dollar’s imminent rise doesn’t mean that gold can’t still experience some very short-term upswing, but for the medium-term, the precious metals continue to face bearish headwinds.
With the greenback laying back and enjoying a well-deserved Easter vacation, gold, silver and the gold miners avoided a dollar-drama for at least another day. However, with the USD Index working to regain its supremacy, along with investors’ respect, the ‘death of the dollar’ narrative has quietly dissipated from the investing zeitgeist.
Case in point: the USD Index has broken above its monthly declining resistance line and has already made four new highs since the New Year. More importantly though, because the precious metals have a strong negative correlation with the U.S. dollar, the upward momentum has coincided with an 8.78% drawdown of gold, a 6.18% drawdown of silver and a 6.41% drawdown of the GDX ETF.
Wednesday, March 17, 2021
US Dollar Debasement Accelerates with Biden Bailout / Currencies / US Dollar
By: MoneyMetals
As Washington prepares to pump another $1.9 trillion in stimulus into the economy, asset prices are lifting. From food to housing to equities to precious metals, inflationary pressures are being felt in all markets this week.
Investors can thank politicians and their enablers at the Federal Reserve. On Thursday, President Joe Biden signed the massive $1.9 trillion coronavirus relief package into law.
Direct payments of $1,400 will soon be hitting Americans bank accounts. And hundreds of billions of dollars will be deployed to bail out state and local governments. Of course, funding for various other programs unrelated to COVID losses was inserted into the legislation as well. As well as a remarkable federal ban on states enacting net tax cuts.
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Friday, February 05, 2021
US Dollar Has Crossed the “Event Horizon” / Currencies / US Dollar
By: Raymond_Matison
The “event horizon” is a term used in astronomy which describes an imaginary point some distance from a black hole in the center of a galaxy where the gravitational force becomes so strong that any heavenly body which crosses that point (visualized as a circle around the black hole) cannot escape the hole’s gravitational pull, and matter is inexorably pulled into the black hole destroying it completely. This is an apt analogue to the continuous and increasing printing of fiat currency where once an astronomic amount of debt is issued creating the currency, it then starts to lose purchasing value such that it is no longer possible for it not to lose all or most of its value, and it collapses on itself. Similar to stellar mass being destroyed in the case of black holes, the currency and its purchasing value is completely or mostly destroyed.
This article proposes that unrelenting growth of national debt, which is the basis for currency creation has reached a global inflection level such that the value of fiat currencies across the globe, with several notable country exceptions, are drawn into a whirlpool of decline that will ultimately result in its near complete loss of value.
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Friday, January 22, 2021
US Dollar Decline creates New Sector Opportunities to Trade / Currencies / US Dollar
By: Chris_Vermeulen
The weakness in the US Dollar, which initiated after the Covid-19 peak in March 2020, has entered an extended downward price trend which is nearing a key support level near 88.33. One key factor related to this trend is a weakness in the US Dollar, which means other foreign currencies become comparatively stronger. This transitional currency valuation phase creates an environment where localized foreign investments may become much more opportunistic than the US stock market/sectors if this US Dollar decline continues. Simply put, foreign investors will suddenly start to realize they are losing alpha in US Dollar based investments compared to stronger, foreign currency-based investments over time and move their capital to profit from the US Dollar’s decline.
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Wednesday, January 06, 2021
What Will the U.S. Dollar Ring in for 2021? / Currencies / US Dollar
By: P_Radomski_CFA
The fate of the U.S. Dollar will weigh heavily on the future of the precious metals in 2021. At first glance, the USDX’s prospects look rather bleak in the first months of the year, but as the pages of the book turn, the dollar’s likely later ascension could prove rather bearish for gold and the PMs.
Breaking hearts as the USD Index falls in and out of love, the greenback continues to leave bulls at the altar, which is likely to have important implications for the gold market in the following weeks . Dressed to impress, investors lined the cathedral aisles as the USDX looked ready to commit to the 90-level.
But as cold feet turned into a dash for the exit, 2020 ended without a celebration.
However, as we enter 2021 and net-short futures positions (non-commercial traders) remain at their highest level since 2006, the slightest shift in sentiment could have wedding bells ringing again.
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Wednesday, December 30, 2020
Further U.S. Dollar Debasement Ahead in 2021 / Currencies / US Dollar
By: MoneyMetals
In a year that was marred by a global pandemic and a wave of economic restrictions that crippled many small businesses, financial markets proved to be resilient.
Of course, that resilience owes in no small part to the unprecedented outpouring of stimulus from Congress and the Federal Reserve.
More stimulus is on the way. On Sunday, President Donald Trump signed the latest COVID relief package into law.
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Friday, October 02, 2020
US Dollar Staying Engulfed in Bearish Bias Amid U.S Presidential Debate / Currencies / US Dollar
By: P_Radomski_CFA
The USD Index declined yesterday, while the precious metals market moved higher, possibly due to the relatively “turbulent” pre-election debate in the U.S. But still, did anything actually change regarding the outlook?
Not really.
As we have stated in our previous analyses, while gold and the rest of the precious metals market will probably decline significantly in the following weeks, and that a short-term correction would not be surprising at all. The same holds true for the USD Index, except that the direction of any possible moves could be considered the opposite.
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Wednesday, September 23, 2020
What’s Behind Dollar USDX Breakout? / Currencies / US Dollar
By: P_Radomski_CFA
So far, 2020 has been an incredible and challenging year for the many markets, and that does not exclude gold, arguably one of the most important and most valuable commodities in the world.
The yellow metal’s price is influenced by a myriad of obvious and non-obvious short and long-term factors, such as the long-term turning point and its self-similar pattern. In recent months, we’ve already discussed the presence of gold’s long-term turning point in broad detail. Furthermore, only a couple of weeks ago, we’ve learned about the powerful self-similarity pattern in gold, making sense of similarly shaped patterns in the marketplace over different periods.
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Thursday, August 20, 2020
US Dollar Setting Up for Potential Upside Election Trend / Currencies / US Dollar
By: Chris_Vermeulen
- Presidential election cycles drive US Dollar trends.
- US Dollar expected to rise before the election and then stall right before the day of the election.
- Money will start shifting away from the stock market now, and traders will likely target safe-haven investments and undervalued traditional investments (dividends, blue chips, utilities, energy, bonds, consumer service and supplies, and possibly technology suppliers) going forward.
- The potential for a US Dollar upside price rally after the elections (just like the 2013~2014 setup) is a very valid expectation from a technical analysis perspective.
Thursday, August 20, 2020
Technical Analysis Points to US Dollar Upside Potential / Currencies / US Dollar
By: Chris_Vermeulen
Article Highlights:
- The US Dollar Presidential Price Cycle indicates rising US Dollar
- The US Dollar is not the best asset, but rather the best of all currencies
- Price Relationships Suggest The US Dollar Is Currently Undervalued
- How The Presidential Price Cycle May Create Opportunities in Precious Metals and the US Stock Market
It’s been a while since we published an article about the US Dollar and this is the perfect time to discuss that is likely to happen over the next 6 to 18+ months. The US Presidential Election is just around the corner and traders/investors are certain to interpret the uncertainty of the US Presidential Election cycle, and the pending policy and liability related changes, as a warning that equities and the US Dollar may be in for a wild ride over the next 6+ months.
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