Do or Die For USD – Seriously…It's Do or Die

At these levels you’ve got a pretty serious situation on your hands.

The U.S Dollar is literally “a hair way” from breaking below an “extremely significant level of support” with some pretty wide-reaching implications.

A massive drop in value of USD from here ( where it’s “already” dropped huge! ) would have serious ramifications as the international investment community and “world-wide holders of USD” would be concerned – continuing to watch their “USD reserves” reduced to toilet paper.

How much lower before a “literal waterfall” ensues? With international holders of USD finally giving up and “adding” to the selling pressure –  hoping to “just get out” with whatever they have left.

On the flip side……a “much expected bounce” and medium term move higher in USD will also force bond yields higher, tank corporate lending, push up interest rates and add continued pressure on the repayment costs of the U.S Governments monumental mountain of debt??

The U.S Government and buddies at the Federal Reserve have put themselves in a corner alright………………….with the only ones I imagine paying for it – being U.S citizens.






10 Responses

  1. David April 10, 2014 / 1:54 pm

    Some good risk coming off today in stocks but dollar remains weak and AUD surprisingly resillient. Added some more short at 0.9440 (avg price of 0.9320 now; targeting 0.92 instead of 0.90 now though) and can’t wait until “Pay day”. This will be frustrating if we blow passed 0.95 next week with no retrace though; then it’s all eyes on 0.97’s and if you can imagine, parity.

    • Forex Kong April 10, 2014 / 2:27 pm

      Slow and painful but I’m seeing AUD/JPY making the move ahead of AuD/USD.m Absolutely “the most bizarre period of currency movement” I’ve ever witnessed with both AUD and NZD like steel!

      Maybe USD puts in a “swing low” here and survives.

  2. David April 10, 2014 / 2:40 pm

    This reminds me of what happened months ago when stocks kept relentlessly grinding higher and higher while AUD couldn’t catch a bounce for the life of it; I thought that was really bizarre as well.

    • Forex Kong April 10, 2014 / 4:28 pm

      This “is” totally bizarre but I think it’s about run it’s course here.

      If USD “indeed” bottoms out here and swings low / reverses above the low on March 17th ( 79.24 ) I’ve got it that the ensuing rally will be weeks and months in duration.

      This would be a snap forex wise, as it would line up well with fundamentals at this point ALL suggesting ( rising rates, higher dollar , safe haven flow , sell in May , global macro ) etc…

      Gonna get a post out on it, as many currency pairs would be “pretty ripe for the picking” if we could get a consistant move “up” in USD.

  3. schmederling April 10, 2014 / 4:48 pm

    I have a weekly set-up running sometime now which I have been tracking – very close to a Neg fire here which could IMO lead to a water-fall decline here – with the monthly providing the follow-through….. could be interesting indeed!!
    We will see what’s in store for the USD here – Aussie continuing it’s large W pattern on the daily & weekly as well….

    Cheers Schmed,

    • Forex Kong April 10, 2014 / 5:00 pm

      We’ll get our answer on USD as early as Tues so…….

      Let’s watch the fireworks!

  4. Farhan Nasir (@FaniNasir) April 11, 2014 / 2:03 am

    So AUD is turning nicely daily a inverted hammer ,, and today came bk to .93 so a little retrace or a reversal ???

  5. playtheplan April 11, 2014 / 2:40 am

    Hi Kong,
    Question: If the US$ does weaken even more more here, which asset(s) will benefit? Where do you and the international investing community put their money? Can’t see any liquid currency that isn’t also under pressure due to poor fundamentals. CHF? Well, it would certainly give their central bankers a headache in trying to cap their currency. Other nations have already started to squirm now that their currencies are strengthening.

    Would US Tsy still be the best of a bad bunch in pure safety terms if not in yield terms? Looking at the yields on some of the European periphery, looks like Europe is all fixed so perhaps some Greek or Spanish bonds?

  6. playtheplan April 11, 2014 / 2:46 am

    By the way, the part about Green/Spanish bonds was sarcasm :-p

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