It looks like US dollar's two-month downside correction ended. Is the bull market resuming?
A lot of people have got very excited as the price of WTI has bounced back from the lows reached a few months ago. If oil fails to break and hold above $62 this time around, however, their enthusiasm could well be misplaced, as the fundamental factors that caused the price decline in the first instance are still in place.
Dollar downmove still seems corrective in nature. Fed hike in September still seems most likely scenario. Taalk of US recession is over the top when unemployment, broadly measured is falling and weekly initial jobless claims are at new cyclical lows.
A straightforward analysis of the near-term outlook for the dollar, oil, 10-year US and German yields and the S&P 500.
A look at the drivers for the week ahead.
Yogi Berra, one of the keenest observers of the human condition, is said to have once remarked "It is tough to make predictions, especially about the future." And so it is.
After trending sharply higher in recent months, the US dollar has entered a consolidative range against most of the major currencies.
The US dollar has been even stronger than this bull thought let alone the perma-bears. Here's why,
Even before the disappointing US jobs data, we anticipated a downside correction in the dollar after a sharp advance in Q1.
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.