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UUP

USD - Bearish price action on the monthly chartsBearish price action is forming in the US Dollar on the higher time frame charts. On the weekly charts an evening star pattern has formed on a bearish pin bar is currently forming on the monthly. Price action next week will tell us a lot about where the dollar may be heading, but if the dollar closes the month even weaker then it is right now it could mean continued bearishness in the dollar over the next year or two. This is certainly worth keeping an eye on.
TVC:DXYShort
by krugman87
1
Shrinking Dollar LiquidityContracting USD liquidity supports a bullish US Dollar view and a risk-off positioning. If the global Dollar liquidity fails to improve and continues to contract a deflationary environment may be ahead. Certainly the USD indebted EM countries & corporations have already been heavily impacted by the rapid rise in the dollar. Commodity indexes have shown this down turn for some time already and "Doctor Copper" is rapidly approaching a bear market. The OECD composite leading indicator (CLI) has shown a significant down turn lately. It was designed to provide early signals of turning points typically 6-9 months ahead of the business cycle. The DXY is rapidly approaching the 97 handle at this time. Short term this move may be overdone as the EURUSD has dropped beyond the expected move range for the month. This 'dollar shortage' is caused by a slowing down of USD creation, as less USD is provided for the global financial system. Monetary policy actions by the Fed continue to tighten and drain liquidity from the banking system : 1) QT is shrinking the balance sheet at a rate of soon to be 50 billion monthly 2) two more rate hikes of 0.25% are expected in 2018 on the overnight rate At the same time as increased Treasury issuance: Ballooning federal budget deficits means increased borrowing right at the same time as the Fed is cutting purchases. Tax revenue is less than spending (Trump’s tax-cuts are part of the problem). This is expected to boost the cost of credit, and likely ripple through the economy. Anticipating such financial conditions ahead, many fund managers have already positioned portfolios defensively as markets proceed into a risk-off phase. The challenge is for managers & investors to identify ideal assets to navigate safely through a shrinking pool of liquidity. The end of this credit cycle will be no different to previous downturns.
TVC:DXY
by dime
7
DXY going up. COT data favors strong DXY.The COT data is very important for traders to understand. Go to barchartdotcom. In the upper left, click on futures . On the left, click on commitment of traders. In the center left, click on DXY. The middle graph shows the positions of the Commercials (banks, etc), the Large Speculators, and the Small Speculators. The lower graph shows Dealer Intermediaries, Asset Managers, Leveraged Funds, and others. When you slide the mouse over the futures curve, a popup shows the COT data for that week. The Commercials (and Large Speculators by some) are called the smart money. Try to side with the Commercials for long-term trend changes changes. The last time the Commercial shorts were this low was June, 2014. There are data for the major currencies and commodities. Look at AUDUSD for example. The Commercial shorts are near all time highs. I am less enthusiastic about going long gold or silver right now. The COT helped me a lot with my prior gold and silver trades. A strong DXY has widespread effects on currencies and commodities.
TVC:DXYLong
by haug01
3
DXY has a Bullish Pin Bar on its Daily ChartDXY has gone down for 8 months while EURUSD, AUXUSD, and USB30YUSD and many others have done great. I will take profits today on GDX and SIL in my 401k. I will go long on UUP in my 401lk. I went short on a CADUSD future last night and EURUSD future this AM in my margin account. I am ready to short US equities (SPXUSD, NAS100USD, DJI), bonds, and commodities. A strong dollar is "deflationary" from a US perspective. Traders can wait for confirmation or take precautionary measures as desired.
TVC:DXYLong
by haug01