Here are my discretionary thoughts on forex and commodities. I only trade the stock market.
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- The U.S. dollar is starting to have a positive correlation with interest rates
- Whether interest rates breakout or not depends on oil.
1 am: the USD is starting to have a positive correlation with interest rates
The USD Index did not have a positive correlation with interest rates in Q1 2018. This surprised many people (myself included), who thought that the USD would rise along with interest rates.
This is starting to change. The USD Index is starting to go higher with interest rates. The 2 markets are now positively correlated.
A 10 year yield breakout above 3% would = a medium term breakout from its consolidation range.
1 am: Whether interest rates breakout or not depends on oil.
Interest rates are rising because inflation is rising. Inflation is rising primarily because oil is rising. In order for rates to meaningfully breakout above 3%, oil has to continue going up.
Oil’s main resistance zone is at $75-$80, which means that oil still has some room to rally in the short term. But this room is limited, which suggests that the rally in interest rates will be limited as well.
Read Forex & commodities on April 24, 2018: outlook
I only trade stocks. These are just my thoughts/outlook on other markets.
- Gold and silver are in bull markets.
- I’ve decided to buy some gold and silver as long term investments.
- The U.S. Dollar is in a bear market.