It's Dollar Index:
As you can see in the chart above - Dollar Index is right now trading very close to strong Horizontal Support Zone of 93 and 200 weeks moving average. Technically, this should act as a great support area for DOLLAR index and the dollar should ideally strongly rally from this level.
It's amazing that as Dollar index approaches the key support zone of 93 - Emerging market EEM index is about to encounter a significant resistance zone of 45.
MSCI EEM is at 44- and very close to the critical resistance level of 45. And if for any reason- EEM crosses 45 there will be crazy momentum pic.twitter.com/D28BsLsISF
— Deepak Singh (@smarket) July 27, 2017
We are in for very interesting time as USDINR is also trading near 200-week moving average
So - what are we looking at NEXT -
1. USD Index breaking down 93 - which makes no sense considering state of US economy and interest rate cycle. Theoretically - USD index should sharply rally from 93
2. If USD Index holds and rallies, then USDINR will strengthen and it means a steady depreciation in INR
3. What happens to EM equities - Will it stall at $45 or continue to rally. What will it do to currency market?
We are about to enter very interesting time and anything can happen. Just follow the Price Action. All I can say is keep a close eye on dollar index for now and be prepared for anything. I have my bias but I don't know for sure
Science of Stock Price Action Premium Case Study
Do you want to Learn Science of Stock Price Action with more Live case studies covering Indian and Global stocks - www.smarketpremium.com
— Deepak Singh (@smarket) January 27, 2017
Disclaimer – The state of the market notes is Deepak’s perspective on the market. The column is purely for educational purpose. Nothing contained herein is a solicitation to trade or a recommendation of a specific trade. By reading this publication you agree to make no trade relying in whole or in part on the comments of the writers