Imagine that. Futures traders are still net short the dollar according to Goldman.
https://twitter.com/Mayhem4Markets/stat ... 9378038937
The escalating war in the Middle East could be the straw that breaks the back of the US dollar super bubble.
As oil prices rise and the US budget deficit widens, bond yields will surge.
This is likely to pop the stock and property bubbles in the US, then everywhere else.
China’s surging trade surplus and wage inflation will only add pressure to its unofficial dollar peg. Once that “peg” breaks, the dollar will collapse.
If the Fed overshoots raising rates, the economy will eventually start cooling down. At this point, the Fed will go back to its old playbook of cutting rates and printing money to help stimulate the economy.
At the beginning of October, DXY was up nearly 4% year-to-date. As of writing, DXY is now up just 0.37%.
Based on my analysis, I expect at least another 10% decline or so before the dollar stabilizes.
Currency brokers offer up to 40x to 50x leverage. So even if you only use a fifth of what a broker is offering you, you can still use 10x leverage.
10x leverage on a 2% move now becomes a 20% move instead.
An overbought RSI and strong resistance at 104 is a dangerous combination for the dollar.
I’m betting the dollar will stall at this level once again… and then start falling.
China, the second-biggest foreign holder of US Treasury securities, cut its holdings by US$18.6bil to US$797.7bil as of the end of January from December.
Since April 2022, China’s holdings of US Treasury bonds have always been below US$1 trillion.
China will likely increase holdings of gold and other assets to further diversify its foreign exchange reserves.
Users browsing this forum: No registered users and 2 guests