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2/44
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The US Dollar has been on the spotlight since beginning of the year as momentum has surprised everyone. Retracements continue to be shallow. The dollar bullish trend is well mature on its own and I thought it's the perfect time to reinforce my view on the dollar as many are asking: what's next for the US Dollar?
This is the US dollar's fastest rise in 40 years, and it's up 14% on this year alone, and I was one of the few to speak about the dollar rally, even before the trend to be put in motion.
Explaining the dollar's incredible turnaround, at current speed and velocity is not quite hard to explain if you have been following my articles. There are plenty of evidences, from my side, as I was preparing for this kind of move. To understand better what it's happening with the dollar i'll suggest to go over and re-read my previous articles here:
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Daytrader21 avatar

For those who are interested to find more about my own view on the US Dollar, I wrote last week an blog post talking about the 1980-1985 US Dollar analog which fits perfectly to current market environment and also it's a fractal for current price action. See link above.

foreignexchange avatar

Thanks, this article is interesting and qualitatively. Did you also have some correlation analysis with labour market ?
Great article 

Daytrader21 avatar

foreignexchange Unfortunately I never looked into that stuff, when it comes with the currency market the 2 most important things I look at are inflation and interest rates I think that anything else will just alter the view of the market, of course this is just my own opinion. Thanks

Illya avatar
Illya 27 May

It looks like you spend a lot of time for this report.Good job!!!

Daytrader21 avatar

@lllya It takes some times to put all the pieces together and also I do a lot of research because I want to provide high content to my readers. Thanks for the good words.

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3/21
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2014, for the most part, has been an interesting albeit quiet year for the FX markets. G10 volatility is the lowest in the post Bretton Woods era. However, while some Global macro firms are struggling, in actual fact, its been a perfect year to trade upon these ideas.
So what is Global macro? - Simply, its looking at the fundamentals of a country or area, and trading based upon the findings. Whether its in the Equity markets, the fixed income world or even in FX. Fundamental analysis is the cornerstone of investing, as has been as long as trading has existed.
Global macro is really considered a strategy, alongside the likes of Equity Long/short, Event drive, Arbitrage, Volatility... So far, this year Macro funds have performed very poorly, averaging -2.83% across the major Hedge funds.
In FX, the key determinant of a currencies value is how central banks act, and their policy. Whether they are hawkish or dovish impacts both the supply and demand for currencies , and simple economics. So far this year, there has been substantial divergences in central bank policy. And if we can correctly predict *where* they are going from here, then trading in FX becomes really simple.
If we consi…
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Daytrader21 avatar

I think Paul Tudor Jones described current trading environment the best: "Manic depressive trading in a volatility-compressed world." He made this comments few months back at Sohn conference. You can't argue with the macro trading king:) when he say:"Macro trading is about as difficult as I’ve ever seen it in my career.” By the way that "inverse gaussian distribution curve" of perception of monetary policy standing looks quite interesting. I've seen one presented by the guys from dailfx, a bit different than yours but of course each with his own view:). Nice article as always.

Elani avatar
Elani 20 Aug.

well as a beginner I need to learn more in order to understand how to invest with a global macro mindset but thanks for the article  it gave me some basic understanding of it.

mimuspolyglottos avatar

Thanks one more time. The divergence on CBs policies means only one - higher volatility. The wider gap - the higher volatility. Rubbing my hands.

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20/47
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Introduction:The past week, and for that matter month has been based purely on fundamental moves. We have seen the reaction in the last week to Ben Bernanke speech and the accompanying FOMC minutes. These were in stark contrast to the actual FOMC meeting which projected the so called "tapering" to occur as early as September. At the time we saw huge volatility with the USD rallying some 5% vs. nearly all majors, bond prices sell-off forcing yields 50bps higher across the belly of the curve and into longer dated maturities. Now with Bernanke somewhat hinting at a slightly later taper this past week the markets have clearly overreacted with the EURUSD moving from 1.2750 to 1.32 in the matter of hours, furthermore Stocks and Bonds got strongly bid with yields heading back down to 2.5% on the 10's. So the main question is - Will the Fed taper and by when?As of yet, the impact on breakevens has been slight, adding volatility to UK 5Y5Y breakevens but little in terms of direction as the Fed keeps a blurred image of what is going to occur.U.S.with Ben Bernanke stating that the US labour market is much worse than he would like, and growth forecasts are getting slashed day-by-day with Q2 ex…
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HelgaPehkel avatar

"This all sounds pessimistic" hah))

Atashi_Tada avatar

nice one!

fxbird avatar
fxbird 16 July

Great article!

xtrader360 avatar
xtrader360 16 July

Great article

Brasileiro avatar
Brasileiro 17 July

Excelent

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