Forex Critical: Dollar Danger

It was one of those trades that works until it doesn’t. Ever since the U.S. dollar index (DXY) broke out above its 200-day moving average (DMA) back in April, 2018, the index provided a lot of bullish swing trade opportunities. In the early stages of the rally, DXY pivoted around its 20DMA and then its … Read more

Forex Critical: The “Safety Trade” Drives the Swiss Franc Near A 2-Year Milestone

While the volatility index (VIX) is only reluctantly responding to the latest turmoil in financial markets, other safety trades are moving in full steam. The “safety trade” I left out of my last post covering the stock market was the Swiss franc (FXF). At the time of writing the Swiss franc fell to a near … Read more

Swiss National Bank Speaks Frankly On Growing Downside Economic Risks

The Swiss National Bank (SNB) released its latest decision on monetary policy on Thursday, March 21. Apparently the warnings from the SNB were drowned out by the rallies in financial markets that day. The SNB dropped its growth forecast, its inflation forecast, and reiterated that economic risks are biased to the downside. I took particular … Read more

A Gold Bottom But Will the U.S. Dollar Cooperate?

Gold, and by extension the SPDR Gold Shares (GLD), has had a rough year. However, based on a historic flip in speculative positioning in gold futures, a bottom is likely in for GLD. According to the tweet and chart below, the net speculative positioning in gold recently went net negative for the first time in … Read more

A Path Higher for the U.S. Dollar: A Shrinking Trade Deficit

It is increasingly clear that President Trump and his administration will relentlessly pursue a goal of balanced trade with the rest of the world. Trump sees negative trade balances as an absolute bad, and his fiery political rhetoric highlights that positioning. If my interpretation is correct, then I want to stay net long the U.S. … Read more

Betting the Swiss Franc’s Italian-Inspired Comeback Is Temporary

In mid-April I wrote expecting EUR/CHF to finally return to the old 1.20 currency floor set by the Swiss National Bank (SNB) years ago. Two days later, EUR/CHF did indeed hit 1.20….for all of a few hot minutes. For almost the past three weeks, EUR/CHF has plunged all over again as political turmoil in Italy … Read more

Forex Critical: The Swiss Franc Completes A Reversal A Long Time in the Making

It was utter chaos in January, 2015: the Swiss National Bank (SNB) capitulated on its self-made 1.20 floor against the euro on EUR/CHF. The bottom completely fell out the currency pair and caused ripple effects around the world of forex. I barely traded the Swiss franc since then specifically because of what I perceived as … Read more

Forex Critical – Key Trends Continuing for the Aussie, Loonie, and Yen

The latest CFTC data on the Commitments of Traders (CoT) showed some key trends continuing: new heights of bullishness on the Australian dollar (FXA) and the Canadian dollar (FXC), and on-going depths of bearishness for the Japanese yen (FXY). Speculators increased net longs on the Australian dollar for the 8th week in a row. Speculators … Read more

The Anatomy of a Bottom for the British Pound

(This is an excerpt from an article I originally published on Seeking Alpha on June 26, 2016. Click here to read the entire piece.) The British pound (FXB) suffered a historic plunge in the wake of Brexit’s victory, the beginning of the UK’s divorce from the European Union (EU). While headlines have been full of … Read more