The most important charts this coming week

Without a doubt, if you get the direction of the US dollar correct, it makes most other markets a bit easier to digest. I am attaching the US 10 yr yield, and the US Dollar Index below. i think that if you only pay close attention to 2 charts this coming week – these are the important ones.

The US dollar is trying to break above the resistance barrier marked on the DXY chart below. A move above 95 will make the USD explode in value against almost everything. (Except maybe oil and natural gas. Energy is in its own world right now.) The market certainly looks as if it is threatening that move. Also, the 10 yr yield has held a trendline on the weekly time frame. So here is the thing: A break above that shooting star means higher rates, which could be a reason that people will own dollars. However, if we break lower, the reasoning could be due to ‘fear’ and people running into the bond market. If you see these two markets move, with the DXY breaking higher – you understand the narrative. You can also say the same thing if the yields are going lower and the DXY is falling. (That would suggest no real interest in the USD, but that a pullback in yields is simply that – a pullback.

I have this sneaking suspicion there is a lot of fear out there. This week could be interesting to say the least. Oh, and then there is that whole jobs report thing on Friday. Buckle up, kids.