Below are a few updates of the patterns and fractals we have been following for the USDX - which continue to point towards long-term weakness and a gradual roll over for the index.
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As we have shown in our previous notes, both the last two cycles (94' & 04') where the Fed have shifted postures away from accommodative monetary policies, the USDX has weakened. Below is the 1994 comparative which presents a similar long-term structure and momentum profile for the index today.
Below is a euro comparative for the above time period which was fit based on the IBEX chart. The takeaway for us is that perception trumps the considerable shortfalls in the euro's structural underpinnings here, and that as long as the eurozone continues to move away from disintegration on the visible horizon - the euro will find support with Europe's recovery.
* All stock chart data originally sourced and courtesy of www.stockcharts.com
* Subsequent overlays and renderings completed by Market Anthropology