would love to hear a response from the folks on real vision that have been dollar bears to see if they agree with you or if they are staying the course. I assume a sharp rise in the dollar is bad for emerging markets,gold,oil and metals. if so there could be a lot more capitulation of other assets than folks short the dollar.

Thanks for the timing and detail of execution, this adds a lot of value to the product so keep the articles coming with irregular frequency if you have to. One question that comes to mind is whether the heavy euro weighting of the DXY worries you, as Julian has pointed out a potential scenario of both EUR and USD strength? Any thoughts on a straight out JPY short? Cheers

Thank you!

Elegant & clean setup.

Your case is well laid out, including good entrance levels and risk mitigation strategies. Thanks.

Raoul, Thank you for another excellent and timely piece of research. As a side note, regarding your fantastic recent interview with Kyle Bass and the 'long volatility' trade. I would be very eager to hear your thoughts on expressing this trade via long XAU/AUD. This set-up was originally mentioned by Nancy Davis on RVTV. Long gold, short the Aussie in a 'risk off', high vol environment does seem a good approach, but I'm keen to hear your opinion. Many thanks.

RP. How do you see the stock market react in both situation?

Thanks for the the timely piece. The setup does seem good. I'm wondering if you have an opinion on a JPY vs USD short. Unlike long DXY and the possibility of catching a knife, the short, med & long term term term trend based on simple return momentum is currently in on the side of short JPY/USD (long usd/yen). Carry is also a bit more of a tailwind for this setup. Thanks!

Just so I understand the trade clearly, are you suggesting the buy UUP order should only be placed after Sep 20 and only if it breaks above $24 ("it is the closing price below $23.70 that will nullify the potential opportunity")?

Is the UUP trade interesting if you already own Euro's? Switching Euro's to USD seems to give the same result.

So, lets see how it pans out today. Please be careful of spikes (up or down) as the FOMC comes out...

Raoul, you have said that USD tend to perform well on a strong or weak US economy. But in the last few months, every time we have weak data from US the USD is crushed and hike probabilities goes down. US share of global GDP growth is also less then it used to be and Asia's share is going up. Could it be different this time ? Weak US growth => Weak USD ?

From a long term perspective, given all the analysis you have done in the US pension fund problems, it feels to me that depreciating the USD and pushing pension fund to invest heavily abroad could do the trick in order to solve the problem. What do you think about that ?

Yo ! nice and timely cheers .. If dxy Breaks 92.40 can i have permission to short the f$%k out of oil ?

Hi Raul, I wonder if I could pick your brain about the homeland investment act? According to my research, it was enacted on 22 October 2004 and participants needed to have repatriated before 22 October 2005. So when you look at the DXY chart over this time frame, the appreciation is only about 5% and it spent half of the time at a lower level then the October 2004 level. Here is my source: http://treasurytoday.com/2005/09/homeland-investment-act To help support your dollar bull case, I wonder if you have looked at the moves in DXY post expensive hurricanes: Katrina – 5% appreciation from hurricane end date to December that year. Andrews – 15% appreciate from end date to December that year. Ike – 12% appreciation (nasty pull back at the end however with good risk management wouldn’t have been a problem) The dollar appreciation on other major hurricanes isn’t that good, but these 3 are a lot more costly than the others. My best guess as to why this occurs is because of the repatriation effect, as investors/ business men move money back to the US to re build. Similar to what happened in Japan after the major earthquake and tsunami several years ago. I wonder what your thoughts were on this. I’m short the dollar via euro and A$. Your thoughts are helping me to keep my views as un-biased as I can so thanks.

When you measure speculative positioning as a percentage of open interest (which is a better measure imho than just looking at the amount of speculative contracts), and you compare it to the 2002-2008 us dollar bear market, speculative positioning is now as bearish as at the end of 2002. Stating if a speculative positioning is bearish or bullish all depends on the big trend we are in. In a bull trend, current positioning would be very pessimistic dollar so we could expect a rally (like in the middle of 2016) However, when we are in a structural bear market this seemingly bearish positioning means nothing. On the fundamental side I agree, on the positioning side I disagree. I am also wondering Raoul, what is your target? Do you expect a rally like in 2004-2005 after which the bear trend continues or do you think that the high of 103 on the dxy will be taken out? Thank you very much.

I may be an "accredited" investor, but sophisticated I am not. I've subscribed to Real Vision and Macro Insiders in order to learn from the best. But sometimes (many times?) what is said goes flying over my head. Like Raoul's latest recommendation for a long position in UUP. The five year high has been 26.63 which is only a 10% gain from the current price. Are you talking about taking a leveraged position with options? If so, what strike and what expiry? If not, are you committing large sums of capital to make it worth your while? Either way, great learning tool. Thank you so much.

Thanks for the well laid out trade idea. However, since the DXY is due for a dead cat bounce, it's possible that any near-term rise is merely a false breakout, which eventually leads to a resumption of the downtrend (as some technical analysts ascertain). Funny how one man's emerging bull market is another man's bear market counter-trend rally. Playing devil's advocate, the fundamental case for a weak dollar has been made vis-a-vis the multi-polar world we now find ourselves in (not only politically, but economically). In fact, in the weeks prior to his abrupt retirement, Stanley Fischer even lamented this fact that the world lacks a hegemon and doubted whether the US could fill the void. But I digress. I guess time will tell.

Actually Raoul... My mother is "long" the dollar! Keep up the great work.

9220 #USA

Well we have broken 24 on UUP and DXY getting pretty close to 9240. Waiting to see if this holds into the close! :)

Didn't take this trade, but great work. Restored my faith in MI

Looks like that's it for dollar rally. It's amazing how strong dollar selling no matter what.

Looks like we either had a false break of 24 on UUP or consolidation before further up move. Raoul, what would you do now? Wait and see?

Thanks for being available for questions. I do agree there is a good set up here for at least a retrace of some of the recent decline of the DXY, so I entered the trade in UUP, in addition to some other USD crosses I have already been building in recent days. However, I am unclear if the high reached on 9-20 actually met your criteria for entering the trade. Would you have advised to enter the trade based on that minor break of 24 or were you waiting for a more clear break out? Thank again.

neonazis 3rd, socialists weak 2nd in German election, let's see if this helps at the open

Agree that the Dollar is key to what happens next from a Macro perspective. Interestingly the BIS noted that the outstanding dollar liabilities that was believed to be about 10 trillion is actually around 25 trillion in their latest report. Lots of people wishing for a weaker dollar to persist.

Looks like DXY's finally got that upside momentum picking up. Bank side our fx guys saw EM currencies starting to unwind, especially MYR, IDR , and india

Looks like DXY's finally got that upside momentum picking up. Bank side our fx guys saw EM currencies starting to unwind, especially MYR, IDR , and india