Saturday, 23 April 2016

Has the USD floored in the DXY 93s?

Having formed a clear double top at the DXY 100 threshold in Nov'2015, the USD has seen a great deal of chop, but leaning to the downside. Having cooled 7% across five months, from a pure cyclical perspective, there is now threat of a push higher, not least with the BREXIT vote in June.

USD - DXY, weekly

GDP/USD, monthly

Euro/USD, weekly, 7yr


Weekly MACD (blue bar histogram) for the USD is ticking upward, at the current rate, we'll see a bullish cross in 5-6 weeks.

GDP/USD: critical support is the Feb' low of 1.3830. The ultimate level is from Jan'2009 @ 1.35. ANY price action in the 1.34s or lower would likely result in 'freefall' action to the 1.10s.. or even parity.

Euro: 1.20 remains massive resistance, and the Euro looks to have recently maxed out in the 1.14s. First downside target are the 1.08/1.07s.


The UK vote on whether to leave or stay in the EU is June 23rd. It will be a pretty damn important vote, with huge economic and societal implications.

Best guess: the UK populace vote to STAY within the EU.  

Why? Think back to the Scottish independence vote. Even though the Scots waited centuries for a vote to regain their independence, when it came down to it.. they were conservative minded.. and stayed.

There is clearly a very significant number of the UK populace who are mad as hell about anything related to mainland Europe... but its still not a clear majority.

Indeed, across the last 15-20yrs, the UK - esp' southern England, has become extremely closely tied with mainland Europe, for business.. as well as for tourism. 


If I'm correct in thinking the UK vote to stay, the UK Pound would rebound, along with the Euro.... with the USD cooling. The implications of a weaker USD would be very bullish for most world equity markets. Further, the precious metals and Oil would likely soar.

In nine weeks time... we'll find out.

Goodnight from London

*the weekend post will be on the US weekly indexes

**Video bonus - Mr Long, with Mr Casey

For those in the mood for some fed/economic chatter... this is superb.