The currencies continue to tell the story.
This is a meaningful breakdown now. While there is horizontal support at 95 and 93, I am really concerned that the Canadian Loonie will not be able to find support based on what happened to Australia's dollar and other $USD index currencies.
Here is the currency chart I have been posting over the last few months.
The currencies are breaking down meaningfully. The Yen collapsed and it is clearly being tested to hold support here. The British pound sits below the green line it broke and looks like a flag pattern before continuing lower. The Canadian Dollar held up better than the Aussie Dollar below it, but they both look extremely sick. The Swiss Franc, the Euro and the Swedish Krona all found resistance at the top green line and are retracing. A zoom in on the Swedish Krona shows it gapping past support and looks extremely weak. We'll see if the Euro gets any power here, but I would suggest it will follow the trend shown on all the other currency charts and let go from here. What this all means is I would expect the $USD will rise dramatically from here over the months ahead.
Caution is advised!
Good Trading,
Greg Schnell, CMT
