💡 What I'm Watching This Week
A holiday-shortened week that could decide whether the dollar's pause is a breather or a turn.
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🙌 What I'm Watching. The levels, catalysts, and signals on my screen this week, so you can start the week a step ahead.
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Did the dollar just blink?
Yesterday’s letter made the case that the dollar is the asset to watch right now, because when it turns, the hard assets it’s been draining tend to turn with it. And late last week, the dollar did something it hasn’t done in a while. It blinked. It eased back from its 13-month high after Thursday’s PCE landed in line and the market trimmed its bets on how hard this Fed hikes.
Right on cue, gold clawed back above $4,000 and silver caught a bid.
One pause is not a turn. We’ve watched plenty of them fail. But this holiday-shortened week hands us two events that could settle it. Warsh steps to a podium Wednesday, his second public outing since taking the chair, and the June jobs report lands Thursday, pulled forward a day because the market is closed Friday for the Fourth. A hot labor number or a hawkish Warsh feeds the dollar and the squeeze holds. A soft one gives the bounce in hard assets room to breathe.
That’s the question sitting on my screen all week. Pause, or turn.
Below is the rest of what I’m tracking, the specific levels and the read I’m carrying into each one.
📈 The dollar’s two lines
The Dollar Index is sitting around 101.3 after backing off a recent high near 101.8, which was itself the strongest the dollar has been in 13 months. I’m not interested in the daily wiggles.
Two lines frame the whole week for me.
Above, that 101.8 area. Reclaim it and push through, and the breakout I walked through yesterday is alive and well, the milkshake keeps pulling, and the pressure on gold, silver, and Bitcoin stays right where it’s been.
Below, the round 100 mark. A clean break under it would be the first real evidence the pressure is lifting, and it’s the level I’d want to see give way before I’d trust that the bounce in hard assets is more than a breather.
Everything between those two is noise.
The dollar and the metals are two ends of the same rope right now, so I’m watching which line breaks first. That, more than any headline, tells me whether the bleed in the hard assets built to outlast the dollar eases from here or picks back up. One number does the work of a dozen this week.
