Friday, March 24, 2017

Dollar-Yen Is Losing Its Zen

Happy Friday.

My wife and I just saw the musical "Something Rotten" last night. Highly recommended. It's the best musical comedy I've seen in years, perhaps ever. This Wikipedia page contains some inaccuracies, but gets the gist of it.

Anyway, let's talk about an opportunity that is right in front of us.

As Reuters reports: "The dollar edged up against the yen on Friday, recovering from its worst run of daily losses versus the safe-haven currency since 2010, but gains were capped by worries that U.S. President Donald Trump was on course for defeat on a new healthcare bill."

Here's a chart of the Dollar-Yen. I've added gold for shitzngiggles, as well as a trend indicator on the bottom.

As you can see, the trend in the dollar-yen is bad. It mirrors what is going on in gold. In other words, the dollar's decline is boosting gold.

Now, the dollar is going to try and bounce. It could for a few days. This could add to the pullback in gold, which I talked about in yesterday's Uncommon Wisdom Daily afternoon edition.

You can read the rest of my Thursday analysis on gold by pointing your browser HERE. Read Brad's fine column on healthcare, then scroll down to see my "Mining for Metals" column.

Now, let's get back to the first chart, the chart of the US Dollar-Yen. Look at the ADX trend indicator. It has turned bearish for the dollar-yen. It's true this is a rear view mirror. But the bearish trend really started on the 15th.

And it has plenty of room to get more bearish. There is no guarantee that will happen. But more investor disappointment in Washington could certainly deepen that trend.

So a short-term bounce in the dollar might be a short-term buying opportunity in gold and miners.

Just something to think about on this happy, yappy Friday. 

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