Further decimation of the U.S Dollar overnight has now taken us below a critical level of technical support, coupled with a dramatic and powerful “surge” in fundamental / supporting data.
All CPI readings for a number of European countries came in “above expectations” overnight propelling the EURO and other Europeans countries currencies “even higher” with the inverse effect on USD.
Now falling into “oversold” territory USD is setting up for a bounce / move higher, but that’s not of much consequence really – when you’ve just been completely and totally “fundamentally whipsawed”.
The barrage of conflicting data (suggestion of China’s tightening / slowing, as well the continued notion that indeed the Fed sticks with the taper) has created a scenario,where one has little choice but to either “get out-of-the-way” – or risk great pains in sticking to the program.
I choose to get out of the way. I will not participate in any “waterfall activity” as USD’s “time in the sun” appears to have been / will be short-lived, so will likely look to sell ( at a loss ) remaining open positions on any further strength.
This sets up for a very difficult time ahead with USD now rolling over and suggesting a “continued trip lower”. Personally I’m stunned by the activity but in putting a couple more pieces together am of the thinking that “few of the big boys” really have much faith / belief that the Taper will continue much longer – and aren’t even bothering to catch “whatever move upward” in USD may have resulted. That and the fact that the Fed is still very busy “behind the curtain” doing everything it can to crush the U.S Dollar.
I “may” try again to catch a move upward in USD but in getting my hand caught in the cookie jar here this time – will remain wary.
Considering I’ve suggested late March as a time to consider Fed intervention again ( and further printing ) anyway – I’ll now likely look for any further USD strength as an opportunity to sell / get short as opposed to riding it off into the sunset on safe haven flows.
Go figure eh…me the biggest USD bear on the planet get’s caught long.