The exchange rate may build a declining fractal. Its size may be the same as the size of the first fractal. If the theory is correct, the exchange rate may drop to 96.96 usd.
This looks likely to happen. From a 'fundamental' perspective, we know that there is massive QE happening - which is likely to devalue the strength of the US Dollar relative to the basket of other currencies in the Dollar index. This is exactly what a) Trump wanted b) the FED wanted c) what the de-dollarisation programme among various countries wanted.
A weaker US Dollar is overall better for the S&P500 and DJI -and Mr Trump thinks those two are the economy, which he said was doing "phenomenally well". Saving the S&P and the DJI saves the world from a catastrophic collapse (for how long, I don't know).
So - the FED programme of reducing interest rates and massive money printing - while blow the bubble up harder and bigger - is working (in the shorter term). Catastrophic collapse may happen in the indices and may well have been put off for a soft-landing (if the FED plays its cards right).
Money markets and forex often go mad. Technical analysts will and should exploit bullish moves on DJI and bearish moves on the Dollar Index.
meszaros
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@Captain_Walker, Thanks for the post. As usual, you're back with a high-quality summary. I agree with you on every sentence. I can see that the SP500 and DJI have much higher target prices. And the very high target price of gold also suggests QE. Furthermore, it is also clear to me that the current stopping of the FED rate cut is only temporary. In my opinion, it will continue next year.
A weaker US Dollar is overall better for the S&P500 and DJI -and Mr Trump thinks those two are the economy, which he said was doing "phenomenally well". Saving the S&P and the DJI saves the world from a catastrophic collapse (for how long, I don't know).
So - the FED programme of reducing interest rates and massive money printing - while blow the bubble up harder and bigger - is working (in the shorter term). Catastrophic collapse may happen in the indices and may well have been put off for a soft-landing (if the FED plays its cards right).
Money markets and forex often go mad. Technical analysts will and should exploit bullish moves on DJI and bearish moves on the Dollar Index.