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CURRENCY WARS - First, a major Yen decline

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DOLLAR Rally? Then what ?


The dollar’s rally reversed as predicted in the last update. After forming a choppy top area, it went into a steep decline which stopped abruptly right at important support near to its 200-day moving average on Thursday. Given the magnitude of the dollar’s decline it is surprising that gold did not fare better, and this does not bode well for gold short-term, as the dollar now looks set to bounce back, although longer-term the outlook for it is bleak.


While we can all chortle with mirth at Japan’s laughable attempt to imitate the Fed by printing money recklessly – laughable because they do not have the comfy cushion of being in possession of a global reserve currency - and how they drove straight at a brick wall leading to the distinctive sound of rapidly crumpling metal. What happened in Japan to the Yen and then to the stockmarket should serve as a dire warning to the Fed of what could happen if it continues to abuse the dollar relentlessly as it has been doing. The dollar chart now looks very scary, and although it does look set to bounce back short-term from oversold, which could clobber gold and silver one last time, what looks likely to happen is that it will rally up to form the Right Shoulder of the potential Head-and-Shoulders top shown on our 6-month chart for the dollar index below. Use this as your guide for when to reverse positions – dump the dollar when it tops out at the prospective Right Shoulder high, we’ll offload our “insurance” PM sector Puts for a nice profit and we’ll go aggressively long the PM sector across the board – ETFs, better producing gold and silver miners with low or no debt, and Calls. Note here that the dollar rally up to mark out the Right Shoulder of our prospective H&S top may not get as far as shown on our chart - we could see a stunted Right Shoulder. COTs for the dollar are still extremely bearish, with Small Specs being insanely bullish, which is a huge negative.


/Clive Maund: http://www.kitco.com...ket-Update.html

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  • 2 weeks later...

Walking Back Bernanke Wished on Too Much Information: Currencies


Hedge funds and other speculators dumped more than $14 billion of bullish dollar bets before the Federal Reserve signaled it would pare stimulus, leaving them on the wrong side of a central bank trying to improve transparency.

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  • 2 weeks later...

This could be a good level to switch OUT of the USD and into the Euro


(But be sure to use a stop)


EURO - I am not giving up on it


FXE / etf for the Euro ... update




It has fallen to/near a key support level, but has not broken it.

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... for the record here, after a big day - as reported on DrB's Diary ...


No Punch through - A big drop instead : - 1.82% : That's a massive change for the USD

Falling away from a key chart point


If the Dollar can punch thru some resistance at 84.75 or so, it may shoot up to the next major resistance near 86 ... update




Reports :


US dollar falls, bonds rise on Fed minutes, Bernanke comments

Reuters - ‎6 minutes ago‎

By Herbert Lash. NEW YORK | Wed Jul 10, 2013 6:37pm EDT.

- The U.S. dollar fell and Treasury debt prices rose on Wednesday after the minutes of the Federal Reserve's meeting in June showed policymakers wanted lower ...



Bernanke: Economy still needs Fed stimulus

USA TODAY - ‎3 minutes ago‎

Federal Reserve Chairman Ben Bernanke said Wednesday the central bank will likely keep at least some of its easy-money policies going "for the foreseeable future.

== ==


Are you Surprised ? Apparently, some FX traders were.

Interestingly, the remarks DID NOT HELP BONDS... or even Gold much

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  • 2 weeks later...

Decision Time for the Dollar ?


DXY / USD Dollar trade weighted index ... update



UUP / 2x Bull etf for the USD ... update



A break and drop could come this week


Seasonal pattern:



If it follows the normal seasonal pattern, it will rally a bit from here, and then breakdown in the second half of September.

In a "nornal" year the Dollar's big drops come in the last four months of the year


- I presume it is because of the extra weight of importing goods for the December holidays

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  • 2 months later...

I am planning to sell a big part of my Euro tomorrow


FXE / etf for The Euro ... update - Looks toppy here... maybe




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