I have to admit, this is taking much longer to resolve than I anticipated. As I type, the dollar is having yet another attempt at the 97 level. It must be pretty bruised – how many rejections can it take ?

We’ve built out a large megaphone pattern, with higher highs and lower lows. My thoughts are in the chart below…

Something has to give. The volatility suggested by a megaphone pattern is strongly suggestive of a market trying to find direction. When it does and there is a breakout, I believe it will have enormous implications for global markets. I think the next big move (whether it’s up or down) will be the final one in this pattern. That means we either go above the 109/110 area in a huge bull move, or we drop below 87/88 and we have a full on bear market.

I think the FED could prove to be the key here. Interest rates, as I’ve said before, are closer to the end of the hiking cycle than the beginning (in my view). That (again, in my view) is dollar bearish. Think about it. 22 trillion in debt. How much higher can rates go without causing a debt fuelled collapse ? There is very little room for manoeuvre. They appear to be boxed in, with only one way to go. That may please investors at first, but the full horror of the implications will soon make themselves felt as it becomes very, very clear that the Emperor has no clothes (no policy options) except more low or even negative rates. This monetary farce has always been doomed to failure I’m afraid. It’s simply a question of when.