At the time, I called it the most obvious breakdown on the market…
“The greenback is starting to walk the plank this morning,” I told you on Jan. 31. “Now it’s only a matter of time before it breaks down and moves sharply lower. When it does, it will complete the final part of a downside move that’s been forming for the better part of the past six months…”
Now that a few weeks have passed, things have not turned out exactly as planned:
I was dead wrong on this one. Looks like the most obvious breakdown isn’t so obvious anymore…
A lot has happened over the past couple of weeks that have turned this dollar breakdown into a massive run higher. The British pound was absolutely stomped last week, hitting its lowest level since 2010 after Moody’s downgraded the UK’s credit rating from AAA to AA1. And the media has really run away with the “currency war” theme as Japan pushes the yen lower…
For now, the dollar wins the “best of the worst” award. And after a failed breakdown, it’s not unusual to see a big move in the other direction. With the dollar index topping 5-month highs this morning, you should take warning. Don’t bet against the greenback right now…
for The Daily Reckoning
Greg Guenthner, CMT, is the managing editor of The Rude Awakening. Greg is a member of the Market Technicians Association and holds the Chartered Market Technician designation.
16.6 trillions of gross debt of which 1/3 is non-resident asset.
When I keyin the figures to my little calculator it exploded outright.
Dollar is not love on first sight but as good as declared dead at first look.
Then, optimism claims it rightful proportionate share.
1. if debtors and their testatees or claimants die sooner than you.
2. Relatively, major currencies went off the cliff to keep you in company.
3. Bakken story came to expectation. Gushing out hope but not pure H2O,
with immediate effect.
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