Technical Indicators

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.

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.