Wednesday, 29 April 2015

Another down day for the USD

The USD - King of paper world, continued to cool, with a net daily decline of -0.8% @ DXY 96.29. The 93/92s are within easy reach by mid May. Secondary target zone of 90/89 looks viable by mid June. Broader hyper-upside to the 120s looks due on the next wave... beginning sometime this summer.


USD, weekly


USD, daily


Summary

Suffice to say.. the fifth consecutive net daily decline, and the DXY 95s are already close. The first target zone of 93/92s looks easy to hit within the next 2-3 weeks.

A retrace... and then a hyper-ramp

USD, monthly'3, outlook


The above chart should clarify what I am seeking in the mid term. Under no outlook do I see sustained trading under the old breakout level of 90/89.

After all, do you really think the Euro/Yen are not going to devalue faster than the USD? Then there is the issue of huge capital inflows to the USA... increasing the upward pressure.
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*I am looking to be long the USD (via long equity positions, but also UUP long dated option calls).. this summer. I will be seeking an entry in the 90/89 zone... which looks just about possible in June.. before the first realistic opportunity of renewed upside.
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Looking ahead

Wednesday will be pretty important, with Pending home sales and the latest EIA report. However there is also the first reading for Q1 GDP. Market is expecting 1.0% growth, vs the Q4 of 2.2%.

Further.. we have the latest FOMC announcement (due 2pm). No change in policy is likely. There will NOT be a post Yellen press conf.
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Goodnight from London