Who would have thought the USD would actually be higher post the Fed launching QE3. Well it isn’t, it’s flat. So nothing too shocking other than the fact the USD is close to forming a sustained uptrend. Yes an uptrend in the world’s reserve, and most hated among traders currency, weeks after the Fed unleashed an open ended QE. Even they don’t know what metric will call an end to QE. Yet the USD is moving higher.
The multi-week downtrend has ended and probability now favors the start of an uptrend. The weekly signal is still unclear, but the daily will always preceded the weekly. This does not directly impact equity markets but it will impact currency markets. And directly impact the AUD/USD which already has diverged significantly from equity markets. USD strength will also pressure commodities and especially precious metals which have begun to form a sustained downtrend.