“I’m waking up less at night than I was [over the slowdown in housing]. So far, there’s been remarkably little effect [from housing] on the rest of the economy.”
~ Janet Yellen, San Francisco Fed President, MarketWatch, February 21, 2007
Commentary & Analysis
Maybe the US Dollar Index “correction” is over.
Using a simple A-B-C count of the legs, or waves, down in the US dollar index shows the last leg, or C-wave in this chart, found support right at a key exetnsion level, i.e. wave C = 76.4% of wave A. I know for those who aren’t into this stuff, it sounds a bit like mumbo jumbo—and it may be. But there we have it. And today’s rally in USD on the back of news that President Obama chose Janet Yellen as his candidate to replace Hellicopter Ben makes the rally even more interesting given the consensus view that Janet will make Ben look like a monetary hawk.
This move comes just in time for a significant increase in long positioning in euro currency futures, as measured by the CFTC last week 24 Sep 2013:
Euro Bulls 129,862 +28,899 increase in bullish positions 67% bulls
Euro Bears 64,018 -5,038 decrease in bearish positions 33% bears
…it’s that sentiment thing I guess.