A non-bombastic look at the week ahead in the capital markets.
What next for the greenback?
"Although the market seems obsessed with the euro/dollar parity, SG's Technical Analysis guru Stephanie Aymes stresses that it is the $1.05/1.04 level that is more important, being the lower limit of the EUR/USD?s massive upward channel (see chart below). Stephanie argues that the move since last summer has been relentless and is very similar to the one seen in the late 1990s. She suspects that a break below $1.05/1.04 will confirm that the ongoing move is not a correction of the upmove since 2000, but a much larger down move. In such scenario, the EUR/USD will achieve parity, but this may well be just a temporary support before the downleg extends towards $0.98/0.96 - and even perhaps towards the lows of $0.84/0.82 reached in 2000."
The US dollar firmed at the end of last week. Does this mean the bull market has resumed after the consolidatig its gains in February?
Outlook for the US dollar and other markets in the week ahead.
Technical outlook in the week ahead for the dollar, 10-year yields, oil and S&P 500.
Put on the a tin foil hat if you must, but US dollar's rally is resuming after short consolidation phase. I think the rally is only about 1/3 of where it is eventually going.
I have told you the US dollar was going up for months. Some mocked me. Others insulted me. So what? I tell you the dollar's bull market remains intact.
Simple cogent analysis of the price action in the capital markets. Take it or leave it.
Data and market positioning can explain movement in the currencies. It does not prove that there is no manipulation or a great conspiracy. It just means the markets are understandable without resorting to such explanations. Try it.
When the dollar falls, we are told it is logical. The empire is crashing and burning. When the dollar rises, the markets, we are told are manipulated. Well, the dollar is back, and the technical correction ended, near we told you it would.
The US dollar's run stopped last week, but not before new highs were recorded against the euro, sterling, and the yen. By the end of the week, the euro had risen 1.4%, sterling 0.9%, and the yen had risen as much as the two of them put together. It was the biggest weekly gain for the yen in 16-months.
There is one pressing question that international investors will be mulling this weekend: How far and how long is the dollar's correction?
Deny it. Engage in all kinds of mental gymnastics to dismiss it if you must, but the fact is the US dollar is rising, and not just because of negative developments abroad, but positive economic developments in the US.
A look at the global capital markets as if analysis matters.
Contrary to the death of the dollar chatter, the US currency continues to appreciate. Here's why there is still punch left in the bowl.