DXY Collapses

The US dollar collapsed off of increased risk-on exhuberance after housing price data and earnings reports from Coca Cola and GM, which the markets interpreted as a possible sign of a Fed tapering. We have smashed through the lower bound of the range at 113.66, then 113.37, which we anticipated to hold as a lower bound. We traversed the entire vacuum zone, and fell to support at 110.20 and even tested 109.86 before a green triangle on the KRI confirmed support. It is likely we will equilibrate in this range and establish footing after such a large move. The lower 109's should provide support if we continue to tank. Otherwise, we must cross the vacuum zone again before hitting the next target of 113.37.