Nothing affects currencies like interest rates. We all agree on that.
Historically speaking, the difference between US Government 10Y Bonds(US10Y) and German Government 10Y Bunds(DE10Y) has played a LEADING indicator. As such, the Dollar Index would follow where the interest rates difference goes.
We remember very well what happened to US Dollar in 2018 and its fierce comeback.
Yet again, we are facing the situation EXACTLY the same as was in 2018. How? Listen up:
1) Speculators Dollar short positions are stretched to extremes: 140,000 contracts in 2018 vs 146,000 contracts today .
2) The interest rates differential were leading 6-8 months in 2018. Today, as you can see in the box, the interest rates are leading again.
3) Newspapers are all signalling Dollar crash. Check out Bloomberg's recently published article on "Dollar crash".
Allow me to make you think. They say history does not repeat but rhymes. All three points we made above are the same: WE HAVE BEEN IN THIS SITUATION BEFORE.
We at Caldoon Investment, do not believe in trading signals or anything. We believe in taking out the noise and focusing on true fundamentals because that is your ONLY survival. The Dollar should make a comeback against EURO sometime soon.
How to trade?
Perhaps if you are short Dollar, raise up your stop losses. Do not take leverage trading against Dollar. We are bullish on US Dollar in the MEDIUM TERM(6-12 months).
Historically speaking, the difference between US Government 10Y Bonds(US10Y) and German Government 10Y Bunds(DE10Y) has played a LEADING indicator. As such, the Dollar Index would follow where the interest rates difference goes.
We remember very well what happened to US Dollar in 2018 and its fierce comeback.
Yet again, we are facing the situation EXACTLY the same as was in 2018. How? Listen up:
1) Speculators Dollar short positions are stretched to extremes: 140,000 contracts in 2018 vs 146,000 contracts today .
2) The interest rates differential were leading 6-8 months in 2018. Today, as you can see in the box, the interest rates are leading again.
3) Newspapers are all signalling Dollar crash. Check out Bloomberg's recently published article on "Dollar crash".
Allow me to make you think. They say history does not repeat but rhymes. All three points we made above are the same: WE HAVE BEEN IN THIS SITUATION BEFORE.
We at Caldoon Investment, do not believe in trading signals or anything. We believe in taking out the noise and focusing on true fundamentals because that is your ONLY survival. The Dollar should make a comeback against EURO sometime soon.
How to trade?
Perhaps if you are short Dollar, raise up your stop losses. Do not take leverage trading against Dollar. We are bullish on US Dollar in the MEDIUM TERM(6-12 months).