A fellow Sloper was kind enough to send me this post for you all……
The US $ is close to a reversal and days around Jan 22, 2015 are going to be key. Long-Term the Euro is flawed but over the near term might be time to get bullish on the Euro and bearish on the US $
Fundamentals
The Fundamentals for a strong US Dollar and a weak Euro are many:
- US economy is perceived to be strengthening, Europe weakening
- FED raising rates, ECB lowering rates and easing.
- Possible breakup of EuroZone
- ECB wants lower Euro
And so, now everyone believes that $ is in a new bull market and ECB is going to launch massive QE
Sentiment
Sentiment on the US Dollar is extremely bullish. Pater Tenebrarum’s Blog, Acting Man, mentions that:
- DSI (Daily Sentiment Index) shows 98% bulls and only 2% bears
- SentimenTrader is showing 89% bulls and
- COT reports shows a huge increase in speculative longs (21,000+) in 1 week alone
And has the following chart –
Technical
The daily and weekly technical picture continues to show a bullish trend with no reversal in sight
Seasonality
Peter Brandt on his blog points out that “U.S. Dollar has seen its annual high or low in January in 20 of past 21 years”
2015 might make it 21 out of 22.
Summary
A top in the US $ not in but close. I am going to be watching the Euro around the Draghi’s massive QE announcement on Jan 22 for a possible reversal.
