TheLFB Trade Team review of the biggest economic week of the year that is now being absorbed into forex valuations.
In July of 2008 we posted regularly about Usd strength, at a time that Usd bears were rampant, and as the dollar index was getting sold into support at 72.00. When we look at the posts from that time it turns out that the fundamentals really did lead things. The situation right now seems to have it all reversed, and the flight to 'safety' that happened back then looks as though it will be inverted. The 'big picture' reveals a 'clear picture', but it does take time to come into focus. The charts are revealing the start of a swing point, the dollar index is at a major price area that really has to hold, and the Fed is de-valuing the dollar at a pace never seen before.
Time will tell, as it did back then, but we will be really surprised if the Usd can hold values going through the summer of 2009. Right now the fundamental and technical reads are pointing to a Fed-lead Usd re-valuation it seems. It may not be this week, maybe not this month, but any trade that buys the Usd may just want to be with a slightly reduced number of lots.