After a weak bounce from the recent lows in the dollar it is now testing it's previous lows threatening an accelerated downturn. I wrote previously that there was very little support for the dollar until it hit much lower lows. A dead cat bounce was inevitable on the way down, but I'm not surprised that the bounce was lacklustre. It's plain for any trader to see that there is very little support and so few buyers returned to the market.
Once we enter the next move down in the dollar, we are effectively entering a quickening, not only for the dollar but for the entire global economy. The dollar, as the reserve currency, is a reflection of the entire US economy, and the US economy (being the largest) impacts the global economy. A strong dollar is an indicator of a strong economy. A weak dollar is an indicator of a weakening economy. Regardless of what Trump says, if the dollar falls from here, it will take everything else with it.
Everything else seems to be lining up for the quickening. Gold is set up for a major push through 1360, the S&P 500 appears to be completing a dead cat bounce and fundamentally / geopolitically we are seeing a great many news articles that are firing nails into the dollar coffin at a rapid pace.
Beware crypto investors – should we see a major crash, people will rush to liquidity and safety. Crypto's are not a safe haven, they are currently a speculative investment. As a technology blockchain is still maturing so crypto's will not escape a market crash unscathed. It might be a buying opportunity, but beware.
For more info please read my previous two market reports here:
For disclosure, I'm not a professional advisor and this is not investment advice, merely my own observations of the market and indexes, so do your own research.
