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@PRO_Indicators This post reminded me your trading in the second half of 2019. You were trading against central bankers and they’ve squeezed your balls (and mine too) until you’ve capitulated with your big size position. That trade had little to do with technicals, it was just pain and nonsense. I feel you’re about to do the same with the dollar trade. Technicals are on your side I agree, but current world situation has little to do with technicals. Central bankers can overcome any technical setup.
Every man and his dog are talking about dollar collapse after Fed committed to unlimited QA and printed trillions already. Dollar short is super crowded trade, virtually everyone is on it. They are right, at some point dollar collapse is going to happen. However, I believe that before it happens dollar shorters will be kicked out of their shoes and rekt. How come?
Well, you’ve mentioned a couple of times that forex is a range, it’s a coefficient between currencies, so by shorting dollar, you’re automatically long EUR, GBP, JPY. Why are you longing them, do you expect them to strengthen based on any fundamental? US is fucked I agree, but in order for DXY to grow it’s enough for US to be less fucked than anywhere else. As long as everywhere else is worse than in US, DXY will grow. COVID-19 situation in EU is worse than in US and the impact to already vulnerable economy will be devastating. EU has negative % rates, lots of problems (COVID-19, economy, migrants) and limited things ECB can do. US has 0% rates, more options for QE for Fed (all their 3 and 4 letter programs announced) and printing press for world reserve currency, decades of experience of exporting US inflation into the world.
To elaborate on the latter, USD is the world’s reserve currency and lots of world debt is nominated in dollars. So whenever some financial institution balance sheet’s asset size is deflating due to asset losing prices, then a debt where those assets were used as collateral will be margin called and dollars will be required to offset it. There will be world demand for dollars as economic situation worsens everywhere and assets depreciate (including US of course).
Here is a contrarian view, I’d like to offer. Trillions printed by Fed are not anywhere near enough to meet the demand. They will be successfully exported from US and won't cause an uncontrolled inflation in real economy. As private and pubic entities default throughout the world, financial assets will accumulate in US, sending DXY and stock market higher. We’ll make new all time highs (approx 100% up from recent lows) and DXY to 120-140. US will be the last to collapse after accumulating all western world assets and that would be the end of current economic era.
I think it’s extremely hard to profit in swing scenarios in the current situation. Enduring swings will be painful. Pro indicators are also effective on lower timeframes and intraday, this is where I personally will focus.
Every man and his dog are talking about dollar collapse after Fed committed to unlimited QA and printed trillions already. Dollar short is super crowded trade, virtually everyone is on it. They are right, at some point dollar collapse is going to happen. However, I believe that before it happens dollar shorters will be kicked out of their shoes and rekt. How come?
Well, you’ve mentioned a couple of times that forex is a range, it’s a coefficient between currencies, so by shorting dollar, you’re automatically long EUR, GBP, JPY. Why are you longing them, do you expect them to strengthen based on any fundamental? US is fucked I agree, but in order for DXY to grow it’s enough for US to be less fucked than anywhere else. As long as everywhere else is worse than in US, DXY will grow. COVID-19 situation in EU is worse than in US and the impact to already vulnerable economy will be devastating. EU has negative % rates, lots of problems (COVID-19, economy, migrants) and limited things ECB can do. US has 0% rates, more options for QE for Fed (all their 3 and 4 letter programs announced) and printing press for world reserve currency, decades of experience of exporting US inflation into the world.
To elaborate on the latter, USD is the world’s reserve currency and lots of world debt is nominated in dollars. So whenever some financial institution balance sheet’s asset size is deflating due to asset losing prices, then a debt where those assets were used as collateral will be margin called and dollars will be required to offset it. There will be world demand for dollars as economic situation worsens everywhere and assets depreciate (including US of course).
Here is a contrarian view, I’d like to offer. Trillions printed by Fed are not anywhere near enough to meet the demand. They will be successfully exported from US and won't cause an uncontrolled inflation in real economy. As private and pubic entities default throughout the world, financial assets will accumulate in US, sending DXY and stock market higher. We’ll make new all time highs (approx 100% up from recent lows) and DXY to 120-140. US will be the last to collapse after accumulating all western world assets and that would be the end of current economic era.
I think it’s extremely hard to profit in swing scenarios in the current situation. Enduring swings will be painful. Pro indicators are also effective on lower timeframes and intraday, this is where I personally will focus.