The Dollar has been in a very strong recovery this month, and we’ve seen even more strength after the ECB decided to cut rates by another 50 basis points. As a result, more investors are looking to short the Euro and favor the US Dollar due the DE-US yield differential. Despite the Dollar’s strength, stocks are holding up quite well, and metals are also showing a strong recovery, with gold trading above $2,700 and silver breaking to new yearly highs, reaching levels around $34.

The key question is, when normal correlations might return or what could happen with the Dollar moving forward. For me, the Dollar has a very strong bullish direction at the moment, so even if we see some retracement lower, I expect more upside, to around 105. In the meantime, there could be opportunities to look for shorts on some major XXX/USD pairs. I may be looking for shorts on EUR/USD rallies and even the AUD/USD, which seems to be turning lower after Chinese shares pulled-back last week.

Despite bullish dollar, gold and silver are looking strong, but we may run into some “mania” phase on metals. Expect the unpexected; be aware of reversals on metals. Dont buy here.

For more analysis and detailed updates, make sure to check our video from yesterday, where we also covered some US single stocks, as well as crude oil and Bitcoin.

Grega