The DXY index is down today, but it is not a huge move itself. The direct implications post the G20 are not that obvious. DXY remains trading within the positive trend, but note that recent high didn´t reach the previous highs. 98 ish area is massive resistance. While the trend is still intact, we will watch it carefully.
A far bigger FX move than the DXY is to be seen in the Yuan. The CNH (offshore Yuan) breaking below the 6.9 level. Note the 100-day average right here.
For the truly (lone) USD bear maybe both yellow and black gold offer interesting long plays here.
Gold is catching a relatively strong bid today. +1.1%. The trend channel since August lows is intact, but in order for gold to properly break up, we need to see a close above the “magical” 1235 area.
The Friday logic about gold and oil as USD hedges have played out well, although oil we must admit trades extremely “tired”, despite black gold being +3.6% on the day. Note all moving averages negatively sloping and the death cross about to happen. For the short term, a bounce to the 57 USD area seems not impossible. This is definitely not a longer-term bullish view we outline, but merely a bounce set up.
Another interesting USD related set up is the Emerging Markets space. This hated space continues to out perform and we are seeing more and more upgrades taking place. As we have outlined before, watch this space, especially one of our favourite risk indicator for the entire space, Tencent (ignoring this Asian giant has been costly).
Note the EEM US trading above the 100-day average for the first time since March as the ETF takes out the negative trend today that has been in place since year highs.
A weaker USD related set ups continue producing nice performance.
Source: charts by Bloomberg