UUP $USD

Yesterday in this post I talked about the strong probability that the dollar was rising too high within the accumulation zone and was likely going to be pulled back down. Overnight a People's Bank of China advisor said the Chinese FX Formation Mechanism needs DRASTIC reform, sending the dollar lower.

It's hard to know whether FX traders had hear whispers or rumblings about this before it was officially announced and therefore backed off accumulation of the dollar when they knew it would drop the next day or if they just simply weren't interested at those levels and would wait for a catalyst to send the dollar lower, it's kind of a chicken or the egg question.

What was unquestionable was the fact that they were not accumulating yesterday

UUP all of yesterday on a 1 min 3C chart.

As of the drop this morning...

Accumulation is back on, at least in the early going.

The overall bigger picture was posted in yesterday's update

Some odd behavior today:

The market reacted well to the drop in the dollar as would be expected, but we'll get to that in another post.

The commodity indicies have reacted fairly well, although it's still early morning trade and a lot cannot be gleaned from retail trade which dominates the morning.

Silver and Gold had decent initial reactions, again, as to be expected. Gold has since gone negative, I believe this is part of the Macro trend in gold we've been talking about ( a decent size pullback in gold).

Oil was the standout. Usually a fall in the dollar send oil prices higher being oil is settled in $USD, not today. This could be because of news that over 120 Syrian soldiers were killed and the fear of tensions igniting from government retribution. That's the only real news I see, other then the fact oil has not been acting well and is in a price position/pattern that suggests it will continue to fall.