Dollar retesting lows – we are entering the quickening
Dollar retesting lows – we are entering the quickening
After a weak bounce from the recent lows in the dollar it is now testing it's previous lows threatening an accelerated downturn. I wrote previously that there was very little support for the dollar until it hit much lower lows. A dead cat bounce was inevitable on the way down, but I'm not surprised that the bounce was lacklustre. It's plain for any trader to see that there is very little support and so few buyers returned to the market.
Once we enter the next move down in the dollar, we are effectively entering a quickening, not only for the dollar but for the entire global economy. The dollar, as the reserve currency, is a reflection of the entire US economy, and the US economy (being the largest) impacts the global economy. A strong dollar is an indicator of a strong economy. A weak dollar is an indicator of a weakening economy. Regardless of what Trump says, if the dollar falls from here, it will take everything else with it.
Everything else seems to be lining up for the quickening. Gold is set up for a major push through 1360, the S&P 500 appears to be completing a dead cat bounce and fundamentally / geopolitically we are seeing a great many news articles that are firing nails into the dollar coffin at a rapid pace.
Beware crypto investors – should we see a major crash, people will rush to liquidity and safety. Crypto's are not a safe haven, they are currently a speculative investment. As a technology blockchain is still maturing so crypto's will not escape a market crash unscathed. It might be a buying opportunity, but beware.
For more info please read my previous two market reports here:
- https://steemit.com/steemsilvergold/@unclehermit/the-s-and-p-500-looks-ominous-nothing-goes-exponential
- https://steemit.com/steemsilvergold/@unclehermit/important-news-gold-resiliance-and-break-out
For disclosure, I'm not a professional advisor and this is not investment advice, merely my own observations of the market and indexes, so do your own research.
Nice post
Once this 10-year US Treasury not hits 3% (which it very well could today - Feb. 15), the dollar will tank even more significantly probably taking the equity markets with it.
Fasten your seat belts.
Yes everything is building for particularly rough time in the dollar.
I don't think there is any doubt that the 10 year is going to break 3%. And, I think it will certainly cause the dollar to sink further but I think it will still be orderly (for now). What higher interest rates do is have a lagging effect on borrowing and will slow the real estate and auto market. This is pretty significant but you're not going to see the devastating effects for a while. I think 2nd and 3rd quarters a lot of damages will become realized.
It will probably be orderly until it's not, meaning that some event is bound to occur which will throw order out of the window. 2nd or 3rd Q is probably about right though barring some event.