BarroMetrics Views: US$ March 25

The DX achieved my minimum target at 82.50 (basis June) and provided a DOJI.

While I expect the DX to move to 84.00, I find it worthwhile to keep the alternative scenario in mind: that if this is a US$ bear market correction and if we have achieved the minimum corrective target, there is a possibility that US$ weakness will resume. In my view unlikely at this stage but within the radar scope of ‘possible’.

One factor in my analysis is the fact that the S&P was able to hold onto its levels in the face of US$ strength. So I thought: “perhaps the inverse correlation is now over”. Then last night, the S&P triggered a sell signal for me. So I have added an additional consideration that the inverse correlation effect has been merely delayed. I won’t have a conclusion until later next.

As for  Gold, I am awaiting a bearish conviction close below 1190 basis June to trigger a sell. And for Crude, I took some shorts in the price ranges 82.250 to 80.475 on the basis that Crude was forming the right shoulder of a H&S.

Next week should be interesting.

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