The dollar strength at the monthly.
The dollar is in trouble now. That green line was its 9-year uptrend support. The channel itself was 11-years old. The 10-year bonds are also sinking to severely low levels.
What does this mean? In the short-term, commodities, crypto (to an extent), and equities will all increase due to inflation. Weaker dollar means more foreign investments and inflating the price. It also means people are less likely to sell.
Why is that? Think about it.
Why would you sell your commodities or equities that are appreciating over time for a currency that it depreciating over time? If people wanted cash, they can take a loan where the inflation would decrease the severity of that loan too - with extremely low interest rates.
In the longer term, this is devastating to the economy in general. You cannot have a thriving economy if your financial sector is unstable. The 10-year bond is one of the centerpieces of the financial sector. Weaker currency and a tanking 10-year bond could destabilize the financial sector. It's not an immediate effect, but it takes weeks or possibly months to sink in. Asset valuations and profit cuts from loans will stress the financial sector.
What matters is tomorrow at month's end. If the dollar cannot recover its former channel, then we may see a price increase due to inflation. However, this breakdown will cause may hasten the recessionary effects upon the public.
The two most important pillars in almost every economy are the financial and transportation sectors. If the economy wishes to recover faster, it will need a stable financial sector. So, the dollar needs to bounce hard today or tomorrow for that to happen.
From a trading perspective, the dollar bouncing may cause a big pullback which may increase volatility within the markets. That would encourage more people to sell. If the dollar bounces hard like that, this may provide much more opportunities for traders to plan their positions.
Personally, I'm holding of all trading until I see where the month closes with the dollar strength. I may miss a good run on commodities, but I'm managing the risk for a last chance bounce on the dollar.
The dollar is in trouble now. That green line was its 9-year uptrend support. The channel itself was 11-years old. The 10-year bonds are also sinking to severely low levels.
What does this mean? In the short-term, commodities, crypto (to an extent), and equities will all increase due to inflation. Weaker dollar means more foreign investments and inflating the price. It also means people are less likely to sell.
Why is that? Think about it.
Why would you sell your commodities or equities that are appreciating over time for a currency that it depreciating over time? If people wanted cash, they can take a loan where the inflation would decrease the severity of that loan too - with extremely low interest rates.
In the longer term, this is devastating to the economy in general. You cannot have a thriving economy if your financial sector is unstable. The 10-year bond is one of the centerpieces of the financial sector. Weaker currency and a tanking 10-year bond could destabilize the financial sector. It's not an immediate effect, but it takes weeks or possibly months to sink in. Asset valuations and profit cuts from loans will stress the financial sector.
What matters is tomorrow at month's end. If the dollar cannot recover its former channel, then we may see a price increase due to inflation. However, this breakdown will cause may hasten the recessionary effects upon the public.
The two most important pillars in almost every economy are the financial and transportation sectors. If the economy wishes to recover faster, it will need a stable financial sector. So, the dollar needs to bounce hard today or tomorrow for that to happen.
From a trading perspective, the dollar bouncing may cause a big pullback which may increase volatility within the markets. That would encourage more people to sell. If the dollar bounces hard like that, this may provide much more opportunities for traders to plan their positions.
Personally, I'm holding of all trading until I see where the month closes with the dollar strength. I may miss a good run on commodities, but I'm managing the risk for a last chance bounce on the dollar.