Dr. Copper, Papa Dow, and international equity indexes such as the FTSE 100 are making the new all-time highs list. And Bitcoin will likely join them as it climbs back above 70,000.
Currency crisis or not, Tokyo is willing to defend the yen in the open market. It's proven this multiple times over the past three years, and today’s FOMC-related volatility will likely test its resolve.
Considering previous yen-buying interventions, the dollar, interest rates, and the dollar-yen pair could be headed lower in the coming months.
Before we dive into the yen, here's a quick update on the action in the euro and pound.
The euro retested its breakdown level from earlier this month, forming a bear flag:
A close below 1.06 completes the flag pattern and sets a rough downside objective of 1.0450.
Check out the XXXL lower shadow in the Mexican peso futures (denominated in USD):
Last Friday’s intraday swing spanned six percent and registered the highest single-day ATR reading since March 2020.
Despite the earth-shattering volatility, the bulls prevailed. That’s the critical lesson from last week’s action: The bulls immediately repaired the damage.
The greenback doesn’t know which way to go, as FX markets offer traders little in the way of breakouts.
Instead of reviewing the chopfest, playing devil’s advocate, and weighing the lack of evidence for a near-term directional bias, let’s turn to a trending market for insight into the dollar.
Spoiler alert: It’s shiny, yellow, and trading at new all-time highs.
Yes, I’m referring to Gold.
Gold and the US dollar hold a classic intermarket relationship — an overt negative correlation.
As I reviewed the charts this weekend, another pattern emerged between the two.
I decided to offset Gold ahead of the dollar by roughly two to four years. After adjusting the charts, I landed on setting Gold forward by 130 weeks (approximately two-and-a-half years).
Bitcoin is screaming its way back to the former all-time highs. Crude is printing multi-month highs. Even gold is breaking out to new all-time highs after going nowhere for years.