Mr. Armstrong; You have been calling for the dollar to decline against
the Euro and it should test the 125 level. Do you see the dollar
continuing to decline which then breaks the back of Europe with
deflation and then everything flips?
Last year was an outside reversal to the upside meaning it made a new
low since 2008 reaching 10341 and then closed above the 2016 high. That
confirmed we should see a lower dollar in 2018 and our target in the 125
level has been slow in coming. There is no reversal of fortune without a
closing above 140. Our minimum target was 12570 with the next forming
at 12890. Thereafter, we reach the major resistance in the 135-140 zone.
The Euro is rallying because the ECB is seen to be abandoning its QE
program which has failed. The rush to the Euro is the assumption that
with higher rates, at last money will come home. We still have a
minefield of political issues.
Creditors are dissatisfied with the lack
of austerity in Greece as well as Italy. Our critical turning point
remains March 2018.
The crisis yet to unfold is will there be buyers of European debt to
take up what the ECB has been buying? This is part of our forecast with
rising rates and the more they rise the worse the budget will get. There
is just no way out of this crisis without serious reform. So people
rushing into the Euro thinking this is a turn-around long-term for the
dollar will be shown that the old saying fools rush in where wise men
never go will be carved in stone.
So for now, we still await the test of 125-128.