The DXY has surprised everyone, breaking out to multi-year highs.
Bearish thesis:
Price is currently stretched 13% above the long term consensus of value (200WMA)
RSI and MACD show negative divergence
Should the dollar reverse and close below $100, a powerful bear trap would be elected. A topping or engulfing candle would attract attention
The smaller time frames imply a parabolic, unsustainable rally leading to a potential crash
Questionable macro-economic strength in USA
Bullish thesis:
Macro-economic instability in Euro-Zone and Emerging Markets
Potential end of the EU and fall of the Euro
Powerful consolidation after 2014's rally could allow for further upside
Note:
COT commercials are long EUR and short DXY. Bearish for DXY.
Bearish thesis:
Price is currently stretched 13% above the long term consensus of value (200WMA)
RSI and MACD show negative divergence
Should the dollar reverse and close below $100, a powerful bear trap would be elected. A topping or engulfing candle would attract attention
The smaller time frames imply a parabolic, unsustainable rally leading to a potential crash
Questionable macro-economic strength in USA
Bullish thesis:
Macro-economic instability in Euro-Zone and Emerging Markets
Potential end of the EU and fall of the Euro
Powerful consolidation after 2014's rally could allow for further upside
Note:
COT commercials are long EUR and short DXY. Bearish for DXY.