Weekly Report Week: Dollar, Euro, Oil, Gold, U.S. Stocks

London (Sept 16)  Currencies: I believe that the dollar has now signaled a failed daily cycle which topped on day 4. It isn't completely out of question that the dollar could have printed a daily cycle low on Thursday but considering the strong moves in the euro over the past month, I think that the dollar printed a DCL in late August and is now in the declining phase of its intermediate cycle. If I'm correct about the daily cycle count, the dollar should still have over a month before the final ICL.
I believe that the next intermediate cycle will left translate and the dollar will make lower lows below 88 later this or early next year. As everything is nowadays measured in dollars, tanking dollar should lead to broader inflation but especially in commodities. The insane money printing by the FED will have consequences and when the inflation finally creeps into the CPI, it'll be too late for the FED to do anything to stop the inflationary wave. I think that the endgame for the dollar is getting close and it'll be very severe.

Now, I'm not saying that the euro will be a better hedge against inflation in the long run as the euro is in the same pit with all other currencies, but at least until we start to see new ATHs in gold and silver, the euro is going to be outperforming the dollar. It's not out of the question that the euro could even reach to 1,30 by the end of the year if the dollar starts to spiral towards the intermediate trendline.

For now, it's hard to say what will happen between now and the FOMC meeting later this month. The euro faces a lot of resistance above and did bounce of the resistance zone on Friday. The FOMC meeting could act as a trigger event which would act as a trend changer for most of the markets or then the event is just shrugged off like most news events. It really depends on how we progress towards the meeting but as long as we keep the big picture in mind, there is lots of profit on the table for grabs.

Frankly, the euro is just looking much stronger than the dollar in short, intermediate and long term. Even with the drop on Friday, the euro closed the week above both its 10 day and 10 week moving averages. Vice versa the dollar closed the week below its 10 day and 10 week moving averages. I think that a lot of dollar bulls will be sweating their palms when the next leg down starts to gather momentum. The dollar isn't particularly strong despite the rally this year.

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