Historically, anticipation of rising US rates has supported the US$. However, in a classic case of rumour over fact, once those rate rises have been implemented the US$ usually reverses.

This year’s signals on the $Index have been bearish and are supporting this view. Sellers have returned to the market.at 14 year highs and from close to a 62% recovery to the entire 2001-2008 sell-off.

The deterioration has attracted buyers back to the market this week with prices testing their 200 day average rate and the improvement could potentially continue towards a weekly bear trend at 100.65.

However, we remain medium-term bears and look to sell into rallies below the trend and with a stop at 102.27, March’s top.

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