«Here are 5 implications.»
The Federal Reserve’s dedication to wrangling inflation has been making waves in the FX market. The U.S. Dollar recently cleared long-term resistance and is now trading at its highest level since 2002. Here are five implications of a super-strong greenback.
①The strong dollar is anti-inflationary and should help the Fed’s inflation-fighting campaign.
②The strong dollar hurts the overseas sales of multinational corporations. This has a disproportionate impact on large caps over small caps.
③The strong dollar favors U.S. stocks over foreign ones. Thus, foreign developed and emerging markets should underperform.
④The strong dollar puts downward pressure on commodity prices. See plunging gold and silver.
⑤Traveling abroad for Americans just got a whole lot cheaper.
Look for mentions of currency pressures to rise during the earnings calls of global companies this quarter and next.
Video Of The Day: Gino’s Gems: How to use Probability Cones in Thinkorswim (TOS) #tradinghacks
Coach Gino explains how he uses Probability Cones in Thinkorswim to better identify price volatility projections and levels to sell options at.
Chart of the Day: Euro falls to Parity
The EUR/USD just hit parity for the first time since 2003.
Tales of a Technician
Stocks are in a tricky spot right now, especially for directional traders. And it’s one big reason why my Team Phoenix Trading Lab has so few positions. Remember, as a tactical trader my job is to use chart reading to assess the odds and only bet when they’re in my favor.
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