The greenback is ripping.
AUD is rolling over.
CNY stalled.
This is not good for gold.
Or the silly AI metals rush.
Which is feeding RIO.
EM is also a DXY downplay.
Junk is cracking lower.
Which is odd given yields.
Bubble paused.
There’s no obvious reason for the sudden volatility, except that there is so little volatility.
The case for a weaker DXY is not very compelling when the entire inflating thing is based on AI, which is dominated by the US.
Then the technicals take over. The Market Ear.
DXY has risen since mid September. We are now trading in the upper part of the range that has been in place for some months. Note we are above the 50 and the 100 day. 99 is the big level to watch. Let’s see how this plays out, but a “proper” close above the 99 area could result in a bigger squeeze.
“…it is notable that the USD downtrends in US hours appeared to have bottomed out in the last week of September. The USD has been grinding higher in US trading hours against both the EUR and JPY since then.”
Euro is trading “well” below the 50 day, as well as flirting with the 100 day and the shorter term trend line right here. Consensus is still bullish the euro, but this continues losing momentum.
The biggest factor is probably the post-election free-falling JPY, which tends to dreaw in CNY.
Yet JPY yields are not affecting anything.
This is a very stable and therefore unstable bubble without an obvious pin, so it looks for one now and then.
