02 April 2011

USDX : Getting More Bearish

  • Monthly : Mar11 close at 75.98 confirmed the downside break of the huge triangle. The bottom edge is formed by a trendline of 4 points so it is fairly significant. Projecting from the triangle, the downside is too scary to contemplate, so for now, restrict strategy planning based on preliminary target of 74.17.
  • In spite of all the recent Fed rhetoric (Plosser, Lacker, Kocherlakota), the reality of it is ... the ECB will hike next week (and again) before the Fed finally acts, if at all this year.
  • Price action tonight very damaging to bulls. Post- better than expected NFP+lower UR, USDX high 76.61, reversed to trade down at 75.81 (below yesterday's close even) now.


Don C said...

Hi TS,

Heart-breaking, for the little girl... cannot imagine the grief her grandma must be going through now, both for loved ones lost, and even more, at the prospect of her little grand-daughter's growing years in the looming future.


Good article on Japan Post and japanese funding structure. But this seeming perpetual machine of low-cost funding (which helped propelled japanese investment growth first in the 70s and 80s, and later, helped cushioned the last 2 decades of anemic japanese growth), is not without it's "real" costs and in the end, is not really "perpetual" -- it is unsustainable and has to end someday.
The key is debt service; and this low-interest/low-cost free ride the japanese government (and by extension yen carry traders) is enjoying shall face its own reflexive turning point in the shape of irresistible demographic shifts.

This ties in with the other very interesting article you shared recently, written by Stiglitz, where he writes:
"[Rather than competition among countries for business] Imagine what the world might look like if the rules were designed instead to encourage competition among countries for workers."

Major demographic shifts (a topping out in global population growth for the first time ever) and competition for human capital shall probably be the major issues for much of this century.

Oops, sorry for longwindedness...

[BTW, France as Spore's largest arms supplier is an outlier: its just from the navy frigates delivered in 2008.
And when the next updated Apaches are commissioned, it will be back to our fav uncle sam once again.]

Taichiseal said...

Don - for some reason, I got your comments in my email but its disappeared from here.

Don C said...

No worries.

Just some run-on concat-ted thoughts from reading diverse articles too late in the night.

Thanks for the articles.