THE DOLLAR CYCLES

During a telecon, a senior MTA member and my mentor Rona Schehrer from Zurich remarked that markets move around a few key assets. And inability to miss out on one can imbalance any sound portfolio. What Rona was mentioning was that even she could generate real alpha, she still had to understand Forex risk. The wild movements in dollar made a fund managers already tricky task trickier.
I promised her to have a detailed look at Dollar Index, so here goes. We have studied the inverted dollar index in this report. Inverted dollar index (=USD) is similar to the Euro Dollar (EUR=). Despite a comprehensive attempt to study Dollar cycles, we could not make an immediate secular case of weakness on Dollar. What we could see was a broad stagnation on dollar for 12-15 months, followed by further strength at least till late 2010. Only after which the next round of secular dollar weakness should begin.
We could be interpreting the cycles incorrectly, but if what we see is correct, then it’s not over for the paper assets. DOW and Global equity has a large bout of strength left. This should be good news for battered equity bulls and bad news for the crisis believers (majority now). This
also means that Gold collapse is more real than what seems. The fool’s gold is trapping as many bulls as it can.
On the minor and intermediate terms, dollar index could push up till 92 (previous 4 levels). After which the large multi month stagnation should unfold. The latest WAVES.FOREX carries other Anticipated and Happened cases on INR and RON Dollar. Euro Ron triangle is fizzling out. We are still expecting a leg up on Euro Ron before the multi month strengthening starts on Lei. If majority of world assets are against dollar and markets core competence is to confuse and surprise, the large multi month dollar stagnation we are talking about is at the right time.
Enjoy the latest WAVES.FOREX
WAVES.FOREX is a perspective product published five days a week. The report highlights the top traded FOREX PAIRS (eg. EURO USD, DOLLAR INDEX, YEN USD, Indian Rupee, Romanian Lei, Swiss Franc, Hungarian Forint, Croatian Kuna, Canadian Dollar). The product highlights Primary (Multi Month) and Intermediate (Multi Week) price trends. The report illustrates key price levels, price targets, price projections and time turn windows. The product uses Elliott waves, traditional technical analysis tools and sentiment indicators.
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WAVES.FOREX is a perspective product published twice a week. The report highlights the top traded FOREX PAIRS (eg. EURO USD, DOLLAR INDEX, YEN USD, Indian Rupee, Romanian Lei, Swiss Franc, Hungarian Forint, Croatian Kuna, Canadian Dollar). The product highlights Primary (Multi Month) and Intermediate (Multi Week) price trends. The report illustrates key price levels, price targets, price projections and time turn windows. The product uses Elliott waves, traditional technical analysis tools and sentiment indicators.
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