USD made a new low at 94.25 in what may be the last probe lower in wave 3. There is a strong likelihood of it declining further to its Bearish Pennant minimum low of 93.93. The USD/JPY pair has sunk below 110.00 for the first time since last October.

The decline in the USD may prove to be a stopper for the equities retracement. If so, we may see SPX decline beneath its prior low. SPX is also out of its correlation with USD, suggesting that it should be considerably lower. Whatever support there is left for equities may crumble quickly.

The only fly in the ointment is what the algos may do at the FOMC press release. The WSJ writes, “Federal Reserve Chair Janet Yellen says she wants to move more slowly on rate increases. But is that how the rest of the central bank feels?

That’s what investors are seeking to find out when minutes from the Federal Reserve’s March meeting are released Wednesday.

“Investors will pay perhaps a little more attention than usual to the…release of the FOMC minutes to see if Chair Yellen’s recent comments were really a measure of the committee’s thinking,” said Shaun Osborne, chief foreign-exchange strategist at Scotiabank. The risk, he said, “is perhaps that the minutes sound a little more hawkish.”

Regards,

Tony

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As a State Registered Investment Advisor, The Practical Investor (TPI) manages private client investment portfolios using a proprietary investment strategy created by Chief Investment Officer Tony Cherniawski. Throughout 2000-01, when many investors felt the pain of double digit market losses, TPI successfully navigated the choppy investment waters, creating a profit for our private investment clients. With a focus on preserving assets and capitalizing on opportunities, TPI clients benefited greatly from the TPI strategies, allowing them to stay on track with their life goals

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