DXY broke into free fall last night. EUR is a mounting pain for Europe:
The Australian dollar is a one way DXY patsy:
Gold is back:
Oil continued its grind:
Dirt whooshka!
Miners were strangely subdued:
EM stocks too:
Junk was OK:
US yields fell again:
As stocks hit record highs in the US but sank in EUR-crushed Europe:
The only chart that matters rebounded:
The SPX/AUD correlation remains at historic highs:
This says to me that the Great Fakeflation is driving much of the AUD value via sentiment not fundamentals. But try telling the Lunatic RBA that.
So, the EUR, AUD, commodities rocket/DXY plunge continues despite wildly oversold/bought conditions. Not surprising really given everything is now fake and all markets are in the same foment absent fundamentals.
Broken technicals alone should drive the trade on for the time being now. DXY has no support down to the 88 area, some 5% below.
But underneath that there are warning signs of trouble ahead. Europe and Australia are stalling as the combined currency and virus anvils land on both:
As we head into what will almost certainly be a US election with volatility for the ages, a reversal of the tumbling DXY trade, even if only a violent correction, looks odds-on.
