Lines in the sand for Dollar

21 Agu 2021

It seems a timely choice to update the dollar chart. Extending the characteristic positioning in the previous euro chart, seems to me to be more in accordance with the needs of 93.75 - 94.00 holding and acting as a reliable guardian for the remainder of August and September, but the threat to an attack higher is real.

• In the DXY chart, buyers will need to make good use of the whitespace above as an attacking battlefield. Things are quite different in the ladder between 95-96, where we are talking of the complex change in nature from corrective to impulsive; in fact we must consider both possibilities as valid in their characteristics
  
• From a geopolitical risk perspective, the task of sellers defending the 94 handle is also complex, buyers can see the problem of restraint they are having and could aggressively rush to USD, moving DXY higher with a hint of more risk (Afghanistan, Taiwan etc).
  
• With all that said, the long term structural decline of the West looks underway with migration Eastward. This will be a multi year/decade long process as long as Dems are at the helm. My impression is as follows; we are trading towards the top end of the range, here actively looking for opps to trade 93.7x/94.0x => 90.6x. This C leg can extend as high as 95.4x and still be valid. Invalidation and reassessment of the view will only be required above 96.3x.