2 Reasons USD Will Soon Drop Like A Brick
Phoenix Capital Research | Aug 21, 2018 09:07AM ET
Yesterday we noted that the USD had fooled 98% of investors into believing a bull market was underway. The USD had done this via a “false breakout” to the upside. That process is now reversing. And the ensuing collapse will be violent.h3 PowerShares DB US Dollar Bullish (NYSE:UUP)/h3
Yesterday, we noted that one of the primary reasons for the coming USD weakness is the fact that the US and China were about to sign a trade deal.
We can now add two other components:
1) The Trump White House is openly calling for a weaker USD.
2) Going long the USD is now the most crowded trade on the planet.
Regarding #1, yesterday at a fundraiser President Trump complained that Fed Chair Jerome Powell hadn’t proved to be an “easy money” Fed Chair. He also commented that he would continue criticizing the Fed if it continued raising rates.
Regarding #2, traders are now more long the USD than at any point in history. Going long the USD is the most crowded trade on the planet. Which means there is a LOT of leveraged, hot money crowded into this trade.
So the USD is now in an extremely dangerous technical formation… at a time when the White House is openly calling for the USD to go lower… and a RECORD number of traders are LONG the USD.
These are the situations from which VIOLENT reversals are made in the markets. The fact is that while everyone is focusing on the near-term, in the long-term the USD is forming a clear Head and Shoulders top.
That’s a heck of a “tell” from the markets. And it’s “telling” us that we’re about to see a major inflationary move as the USD drops hard.
We just published a Special Investment Report concerning a FIVE secret investments you can use to make inflation pay you as it rips through the financial system in the months ahead
The report is titled Survive the Inflationary Storm
Get The News You Want
Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.