The Daily Edge - A Complete Cross Asset Analysis

Quick Take

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We certainty had a high flurry of activity in the currency market, with weakness in the US Dollar at the epicenter of the wild moves as the Fed unleashed yet again another monster-size lending program.

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Quick Take

Case To Sell USD On Rallies Warranted

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It’s been a one-way street for the US Dollar since the technical inflection point back on April 7th. Clients following the daily video analysis I make available every day can attest the directional calls have been accurate and it does not look like the tide will turn yet.

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Quick Take

USD Weakness: Steady As She Goes…

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Equities keep roaring ahead, with the calls made to keep buying the S&P 500 on weakness coming to fruition. The USD vulnerabilities keep flaring up left and right too as the Goldilocks scenario for sellers stays the course…

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The USD & Risk-Off Come Back To Life

Quick Take

What have we learned in the last 24h? Firstly, while some are busy looking for all types of narratives to justify the turnaround in the equity market, those following my daily updates would know how crucial it was the level of resistance reached in the S&P 500. The 2,700.00 holds now they key. A breakout is a key pre-conditions to keep calling for higher levels in the USD index.

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Spike In Equities Sends USD Down Again

What does this push up in equities mean for the USD? After a promising run to the upside since mid-week, there is real danger that the flows in the Dollar start to revert in a more meaningful way the higher equities go as the intimate strong negative correlation between the SP500 & USD index continues to play out like a charm.

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Quick Take

Transient Spell Of Low Vol In Forex & Equities

The equity market in the US continues to display bullish dynamics but the way the run-up in the S&P 500 is playing out, in volatility terms, makes me think the bullish days might be numbered. In Forex, the predominant theme is the establishment of ranges in the 4h charts…

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Quick Take

WTI Negative: COVID Era Defies Old Beliefs

What just happened to the price of Oil? The unthinkable became a reality in the front-month May contract as the price of WTI got slaughtered to levels as low as -$40.00. Producers are at a point where they no longer have sufficient capacity to store all the surplus…

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Quick Take

Oil Rout Spills Over To Broader Risk Aversion

At the epicenter of the dial back in risk sentiment, as a major influence to push the S&P 500 over the cliff and roll over (~-3%) we find the ongoing high vol rout in the Oil market. The renewed sell-side pressure in equities as Oil keeps imploding has had immediate spillover effects in the outperform of the USD, JPY, but also a stubborn EUR and CHF…

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Quick Take

It’s All About The USD And It Looks Strong…

Amid a positive session for Oil, the S&P 500, which is at the epicenter to gauge risk sentiment, printed a +2.3% rise, In Forex, the story is one of positioning for USD long-sided bias at discounts as expressed by the topside auction that failed in EUR/USD.

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Focus Shifts To Outright Euro Weakness

Quick Take

Traders had to digest a plethora of negative news such as absolutely catastrophic global flash PMIs across Europe and the US or another incredible spike in US jobless claims just to name a few. In Forex, the EUR was the weakest link, manifesting fragility across the G8 FX complex…

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Period Of Balanced Flows In Forex Continues

Quick take

I must say that the technical stance in the S&P 500 last Friday left us with a fairly constructive picture. As I shift gears into the FX market, the first thing that jumped out is the cheap levels advertised in the EUR/USD around the 1.0735/40.

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The Aussie Flies Assisted By Stocks

Quick Take

Let’s get started… Scan Of The Markets Insights Into Market Flows (Video) Recent Economic Indicators Educational Material Scan Of The Markets The indices show the performance of a particular currency vs G8 FX.

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Lower USD Near Term? Charts Tell Us So…

Quick Take

The lay of the land in the Forex terrain is not looking precisely encouraging for the USD outlook in my book. Amid overall buoyancy in equity valuations as the world rolls back containment measures, the backdrop for the world’s reserve currency looks negative near term.

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Up Go Stocks & Down Goes The US Dollar

Quick Take

Bulls are pushing equity valuations with flying colors as the S&P 500 finally broke into fresh daily trend highs. In the Forex market, the script playing out so far is one characterized by USD weakness with high-beta currencies exploiting this backdrop the most.

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FX Vol Soars On Month-End Re-Balancing Flows

Quick Take

The Euro and the Pound were the major beneficiaries of re-balancing flows, which happens by month end as global portfolio managers have the need to readjust their benchmarks for currency hedge ratios amid value variations during the month.

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Resurgence In USD Demand As Stocks Sold

Quick Take

With the selling action seen in stocks, and just coming off the heels of a lively month-end balancing flows period, where does this leave us in the currency market? For a starter, in today’s video I point out a rather attractive sell-side level playing out in EUR/USD as an evident USD prop index divergence converged at a 100% measured move.

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Balanced Flows In The US Dollar

Quick Take

In the Forex market, with subdued activity in stocks, no fundamental catalysts to account for, and the typical slow vol from Monday, the end result has been rather quiet range-bound conditions settling in.

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EUR Sold Post German Court Ruling on QE

Quick Take

The Euro was at the epicenter of the daily volatility that hit the currency market in the last 24h as German judges, in a process that has been dragging on for over 5 years, challenged the ECB on its QE activity, giving now three months to justify bond buying program.

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Yen Outperforms All Its Peers

Quick Take

The Japanese Yen has been the star performer in a move that surprisingly didn’t get fueled by that much weakness in the S&P 500 (-0.7%). Even the US long-dated Treasury yields soared, which tends to be associated with Yen weakness rather than strength.

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Risk On The Mend, US Dollar Suffers

Quick Take

In today’s outlook, I argue that at last, there is communion between the 4h and the daily to the bullish side in the S&P 500. The market where I see the USD most punished out of the G4 FX I focus in today’s video is against the Australian Dollar.

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