Friday, 18 September 2009

Weak prospects

BOTTOM LINE: Risk is close to completing the move higher that started in the beginning of September. USD likely bottomed, give or take another 1%.

I am not very clear how the very last leg higher in Risk and related assets (from 3 September 2009) is related to the prior move up from July lows (in thick blue). In any case, this last leg is close to its end. I expect it to end anywhere from here to around 2% above current levels (DAX 5720).

In FX, get ready for a fairly big and meaningful appreciation of the US dollar, about 10% against majors, and 20% against EMFX, as shown below on a daily chart of USD/BRL (Brazilian Real):

No comments: