Technical analysis of the dollar
Dollar strength usually coincides with risk market weakness. In flow terms as the appetite for risk diminishes, American investors repatriate their assets. They sell currency x for dollars – and so the dollar appreciates.
Our job is to indicate (potential) turning points. And there is one here now. We have turned around and a stronger dollar is likely.(and gold – inversely related – should decline as well)
Why is this important for European investors?
The dollar-euro exchange rate is the one most important number in the world. It is a proxy for risk appetite and an indicator of flows. If it has turned it is an additional reason to flee risk