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Falling Equities Still Key for Dollar
Intermarket analysis set-up still suggests that fresh equity selling remains the only source of support for the US currency.
what is your view on equities?
i am an economist and finance person by education so i use combined knowledge.
you are asking a very difficult question about retest of march lows. but my best guess is no based on the fact that the lenders of last resort will ensure the banks and credit remain alive which helps confidence and risk.i believe the lows we saw were pricing in a depression meaning decrease in money supply etc. but we will certainly see a correction downards. my target would be 800 for now on s&p. fund managers are becoming more cautious with their risk allocation and are starting to question the sustainability of recent equity gains. we will have to wait for earnings statements to be issued this month to judge a definite direction.
outlook on us economy is bad as personal savings rates continue to rise amid a change of consumer lifestyle and this is a very important economic gauge. house prices are also not stablising adding to further bank failures and losses.
the dollar will make some gains in this potentially downards risk appetite trend but mainly against pound sterling as the currency remains heavily in question.
BTW, I suggest you change your nickname to Economist rather than speculator since you are actually an economist based on what you said. ;)
Thanks and keep up the good work,
Slaiman
talking about manipulated markets, I'm amazed how the US markets ended up positive after being negative most of the day.
Gunjack, next upside target stands at 1.6815, 50% retracement of the 2.01-1.35 decline
Ashraf
Thx
Gunjack