ONE-TWENTY TWO: Trading Financial Markets
Exploring the poetry in financial markets for students of money and economy since the year 2000.
The U.S. dollar index (DXY) continues to pivot around its 200-day moving average (DMA). Last week, the U.S. dollar bounced before retesting the lows from March. The U.S. dollar now looks ready to challenge its 200DMA as resistance; it will likely complete another cycle by rallying at least to the previous highs above the 200DMA. … Read more
When the stock market sell-off began in earnest in late February, the U.S. dollar index (DXY) surprisingly plunged along with the major indices. I accepted the narrative explaining that the dollar’s decline came from the euro’s gain as “risk-off” traders rushed to close out euro shorts in carry trades. The swiftness of the risk-off move … Read more
In an earlier post on Sunday, I provided reasons to believe that the market was finally drawing a line in the sand for a sustainable bottom. With anticipation, I pronounced I would go on a shopping spreed down to S&P 500 (SPY) 2600. At the time of writing, it looks like I may have to … Read more
The U.S. Senate approved the U.S.-Mexico-Canada Agreement (USMCA) trade agreement on Thursday, January 16th. That timing may mark a major milestone and turning point for the Mexican peso against the U.S. dollar (USD/MXN). The following day, USD/MXN sliced through the low of 2019 and hit a 17-month low. I have been bullish on the Mexican … Read more
U.S. Dollar Breakdown In the wake of the Federal Reserve’s last pronouncements on monetary policy, the U.S. dollar index (DXY) sold off and confirmed its latest breakdown below its 200-day moving average (DMA). This latest 200DMA breakdown looks more damaging than other episodes. For example, the U.S. dollar index extended further below its 200DMA than … Read more