The $US followed bond yields lower last week, as would be expected. If we are correct, the Greenback has now formed a major swing high, and it will eventually test/break the important psychological 100 area. At this stage, the $US has traded in a fairly tight albeit choppy range through 2023; this morning, it is set to open in the middle of its last 12-month range, with follow-through in either direction likely to be determined by bond yields – like most markets!
- We remain net bearish towards the $US, but downside follow-through by bond yields will be required before the Greenback can turn meaningfully lower.
MM is bearish toward the $US over the medium/long term.
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The Euro has been consolidating for months, but it’s now threatening to break out on the upside, in line with our medium-term view. Assuming we are correct, this is an excellent read-through for risk assets and gold but not ASX $US earners.
- We remain bullish towards the Euro with an initial target around the 1.25 area or 12% higher.
MM is bullish toward the Euro medium-term
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