One Trader Explains Why Everyone's Incorrect On The Dollar

This is a few days old only re-reading it over the weekend it seemed 1 of the sharper FX commentaries out there.
From Bloomberg via ZeroHedge:

"Everyone is entitled to their ain opinion, far endure it from me to say otherwise," notes old fund managing director in addition to FX trader Richard Breslow, only equally far equally the dollar is concerned - it's going higher, he contends.

Via Bloomberg,
As truthful equally it is that differences of persuasion are what “makes markets”, I detect the avalanche of analysts arguing for an imminent motility lower inwards the dollar confounding. The most you lot tin give the sack say is the jury is out. Both technically in addition to fundamentally. To say otherwise strikes me equally arguing without the facts beingness inwards evidence. Rhetoric tin give the sack endure an effective shape of argument. It may fifty-fifty endure borne out yesteryear futurity results, only “Leap of Faith” isn’t something that genuinely belongs inwards the pluses or minuses side of the ledger when settling on a trading strategy.

The dollar has been doing a lot of goose egg for the final twosome of months. It volition intermission out at about point. But patience genuinely is a virtue when the range-trading opportunities piece of job along to introduce marvelous possibilities.

The charts are hard to read only if you lot were forced to say something, they would genuinely give a passing nod to a higher non a lower dollar. There is a ameliorate declaration to endure made that the DXY, in addition to surely the EUR/USD, are tracing out potential pennant formations favorable to the currency.

If I were looking for signs of a directional move, devoid of a lot of the cross-currency noise, I’d pose a yellowish Post-it on the bottom of my shroud alongside the arrive at for the euro versus the dollar onslaught June 14. We seem trapped inside it. That’s when President Mario Draghi surprised a bulled-up marketplace for euros yesteryear the extent of his dovishness post service the ECB’s rate-setting meeting. I similar it equally a mark because you lot volition endure pose on notice somewhat ahead of levels a lot of people are looking at.

One thing nosotros practise know for sure is that the Fed is inwards the procedure of raising rates in addition to both the ECB in addition to BOJ 1 time again made it clear, inwards the final week, no affair how wishfully you lot desire to spin it, that they are on agree for the adjacent twelvemonth at least. Global increment is indeed growing, only yesteryear whatever stair out the U.S. is outstripping Europe in addition to Japan. People maintain telling me that all the proficient tidings is already built into the dollar’s value in addition to when, non if, increment differentials narrow markets volition realize the mistake of their electrical flow ways. I’ve got news, those forecasts aren’t a secret.

And those expecting for the Fed to get-go tacking dovish are misreading what Chairman Powell meant yesteryear “for now”. He’s a pragmatist, non a zealot.

The phrase “secular decline” gets bandied close a lot. As inwards the dollar volition resume its motility lower driven yesteryear greater forces...I’m hard-pressed to see whatever secular reject only should it fifty-fifty be you lot would bring gone broke many times over waiting for it to bail out your positions. In whatever case, DXY has spent the bulk of the final 3 years to a higher house its 20-year average price.

The weekly CFTC positioning information is likewise used equally a alert sign of an imminent squeeze....

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The slice to a higher house was posted August 1, Here are the DXY futures over the final ii weeks:

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