We must review the Medium and Long term charts to understand the art of what we are tracking, and the contact between Dollar and safe-haven flows as we enter into another expansion of . The follow diagram portrays the position from earlier in the year, momentum arose with Covid and to such an extent that a rise in USD is no longer possible without venom for EM FX in particular.
We have also been able to construct examples of the flows in main course dishes like EURUSD:
In a nutshell, what we are tracking here is the C leg in a retrace wave, inside a more structural, longer term decline in the USD. A complex multi dimension environment, my short-term models are indicating of USD inflows as a protection for election risk and as an example of the ultimate safe haven with lockdowns & covid chapter II.
The key question which we will answer as we move along will be if this is infact a retrace inside a sustained decline, or the start of a brand new uptrend in USD. In this scenario, a test of 97.5x would be enough to build confidence in the view. Recommend layering these in G10 and EM FX as we go for all those following the live calls.
Thanks as usual for keeping the feedback coming 👍 or 👎