Yesterday, I wrote a whole book about how the tide had turned negative for the USD: post here.
Well, surprise surprise, the damn thing did not break the triangle to the downside (key point needed) and violently broke to the upside today.
It’s one of those weird/cool things. The breakout happened after a release of slightly better CPI and durable goods orders. The numbers itself were not mind-blowing, but it tipped the scale (Euro yields were also sliding as European QE starts next week). The Euro, which had been in a range for a month, slid some 150 pips (wow!). These kinds of moves are not easily reversed, so I think the down trend is set to continue here. If anything, I think a re-test of 1.1250/60 (if it happens) would be a great place to short again.
Another great move today was in the NZD/USD, which briefly traded above the .7600 level. This is a zone that I’ve been talking about for a while as a place where people would look to short. It was a beautiful play if you did as the kiwi is currently trading at .7535. We’re now in a chop zone, so we’ll see how this goes.
Aussie is also back to .7800 after breaking above .7900 (fake breakout I guess?). I think we’ll get buyers here at least until .7856 (the big resistance level). With copper still above the major resistance it recently broke, it could give the AUD (maybe against EUR) some leverage.
Oil is trading at exactly $49 as I type. If this US dollar move breaks it to the downside, #USDCAD will be flying higher too. I’m keeping an eye to see what happens.
Overall, my bias is now to buy more USD dips.