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Currency Market: US Dollar Index on the Verge of a Major Technical Breakdown -- Look Out Below!
The Japanese yen and Swiss franc continue to benefit from US dollar weakness and safe-haven bids.
Cody Tafel    

The US Dollar Index is on the verge of breaking the 79 level, which would bring it to almost fresh new two-year lows. Closing below the 79 level would confirm a head-and-shoulders pattern that would project prices falling back into the mid-70s. I would continue to sell any rallies in the US dollar and position for what could be further weakness. It will be interesting to see if commodities start to get a bid.


Click to enlarge

The Japanese yen continues to look very interesting to me on the long side, and you can see why in the chart below. This currency has basically been flat for the past three months, and it's starting to attack the upper end of the range, which also happens to coincide with the 200-day moving average. The yen could really take off with further US dollar weakness and continued risk aversion in the global macro world. Long Japanese yen could be a great risk hedge here if carry trades start to unwind.


Click to enlarge

The Swiss franc also is trending in the right direction and should continue to benefit as well from US dollar weakness and a flight-to-safety bid amid geopolitical concerns. This currency is also attacking the upper end of recent ranges and isn't far off from breaking out to new highs for the year. There's a big gap down to be filled to get back to the highs of 2011, which were near 1.25, and therefore could justify an upside target of 1.25 for the Swissy. 


Click to enlarge

Good luck out there. As Paul Tudor Jones II said yesterday, this might be the toughest macro trading environment he has ever seen. That's quite a statement from a risk-taker of his caliber who has been doing it for more than 30 years! Keep managing risk!
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Position in MJY & MSF futures.
The information on this website solely reflects the analysis of or opinion about the performance of securities and financial markets by the writers whose articles appear on the site. The views expressed by the writers are not necessarily the views of Minyanville Media, Inc. or members of its management. Nothing contained on the website is intended to constitute a recommendation or advice addressed to an individual investor or category of investors to purchase, sell or hold any security, or to take any action with respect to the prospective movement of the securities markets or to solicit the purchase or sale of any security. Any investment decisions must be made by the reader either individually or in consultation with his or her investment professional. Minyanville writers and staff may trade or hold positions in securities that are discussed in articles appearing on the website. Writers of articles are required to disclose whether they have a position in any stock or fund discussed in an article, but are not permitted to disclose the size or direction of the position. Nothing on this website is intended to solicit business of any kind for a writer's business or fund. Minyanville management and staff as well as contributing writers will not respond to emails or other communications requesting investment advice.

Copyright 2011 Minyanville Media, Inc. All Rights Reserved.
Currency Market: US Dollar Index on the Verge of a Major Technical Breakdown -- Look Out Below!
The Japanese yen and Swiss franc continue to benefit from US dollar weakness and safe-haven bids.
Cody Tafel    

The US Dollar Index is on the verge of breaking the 79 level, which would bring it to almost fresh new two-year lows. Closing below the 79 level would confirm a head-and-shoulders pattern that would project prices falling back into the mid-70s. I would continue to sell any rallies in the US dollar and position for what could be further weakness. It will be interesting to see if commodities start to get a bid.


Click to enlarge

The Japanese yen continues to look very interesting to me on the long side, and you can see why in the chart below. This currency has basically been flat for the past three months, and it's starting to attack the upper end of the range, which also happens to coincide with the 200-day moving average. The yen could really take off with further US dollar weakness and continued risk aversion in the global macro world. Long Japanese yen could be a great risk hedge here if carry trades start to unwind.


Click to enlarge

The Swiss franc also is trending in the right direction and should continue to benefit as well from US dollar weakness and a flight-to-safety bid amid geopolitical concerns. This currency is also attacking the upper end of recent ranges and isn't far off from breaking out to new highs for the year. There's a big gap down to be filled to get back to the highs of 2011, which were near 1.25, and therefore could justify an upside target of 1.25 for the Swissy. 


Click to enlarge

Good luck out there. As Paul Tudor Jones II said yesterday, this might be the toughest macro trading environment he has ever seen. That's quite a statement from a risk-taker of his caliber who has been doing it for more than 30 years! Keep managing risk!
< Previous
  • 1
Next >
Position in MJY & MSF futures.
The information on this website solely reflects the analysis of or opinion about the performance of securities and financial markets by the writers whose articles appear on the site. The views expressed by the writers are not necessarily the views of Minyanville Media, Inc. or members of its management. Nothing contained on the website is intended to constitute a recommendation or advice addressed to an individual investor or category of investors to purchase, sell or hold any security, or to take any action with respect to the prospective movement of the securities markets or to solicit the purchase or sale of any security. Any investment decisions must be made by the reader either individually or in consultation with his or her investment professional. Minyanville writers and staff may trade or hold positions in securities that are discussed in articles appearing on the website. Writers of articles are required to disclose whether they have a position in any stock or fund discussed in an article, but are not permitted to disclose the size or direction of the position. Nothing on this website is intended to solicit business of any kind for a writer's business or fund. Minyanville management and staff as well as contributing writers will not respond to emails or other communications requesting investment advice.

Copyright 2011 Minyanville Media, Inc. All Rights Reserved.
Currency Market: US Dollar Index on the Verge of a Major Technical Breakdown -- Look Out Below!
The Japanese yen and Swiss franc continue to benefit from US dollar weakness and safe-haven bids.
Cody Tafel    

The US Dollar Index is on the verge of breaking the 79 level, which would bring it to almost fresh new two-year lows. Closing below the 79 level would confirm a head-and-shoulders pattern that would project prices falling back into the mid-70s. I would continue to sell any rallies in the US dollar and position for what could be further weakness. It will be interesting to see if commodities start to get a bid.


Click to enlarge

The Japanese yen continues to look very interesting to me on the long side, and you can see why in the chart below. This currency has basically been flat for the past three months, and it's starting to attack the upper end of the range, which also happens to coincide with the 200-day moving average. The yen could really take off with further US dollar weakness and continued risk aversion in the global macro world. Long Japanese yen could be a great risk hedge here if carry trades start to unwind.


Click to enlarge

The Swiss franc also is trending in the right direction and should continue to benefit as well from US dollar weakness and a flight-to-safety bid amid geopolitical concerns. This currency is also attacking the upper end of recent ranges and isn't far off from breaking out to new highs for the year. There's a big gap down to be filled to get back to the highs of 2011, which were near 1.25, and therefore could justify an upside target of 1.25 for the Swissy. 


Click to enlarge

Good luck out there. As Paul Tudor Jones II said yesterday, this might be the toughest macro trading environment he has ever seen. That's quite a statement from a risk-taker of his caliber who has been doing it for more than 30 years! Keep managing risk!
< Previous
  • 1
Next >
Position in MJY & MSF futures.
The information on this website solely reflects the analysis of or opinion about the performance of securities and financial markets by the writers whose articles appear on the site. The views expressed by the writers are not necessarily the views of Minyanville Media, Inc. or members of its management. Nothing contained on the website is intended to constitute a recommendation or advice addressed to an individual investor or category of investors to purchase, sell or hold any security, or to take any action with respect to the prospective movement of the securities markets or to solicit the purchase or sale of any security. Any investment decisions must be made by the reader either individually or in consultation with his or her investment professional. Minyanville writers and staff may trade or hold positions in securities that are discussed in articles appearing on the website. Writers of articles are required to disclose whether they have a position in any stock or fund discussed in an article, but are not permitted to disclose the size or direction of the position. Nothing on this website is intended to solicit business of any kind for a writer's business or fund. Minyanville management and staff as well as contributing writers will not respond to emails or other communications requesting investment advice.

Copyright 2011 Minyanville Media, Inc. All Rights Reserved.
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