Good Morning and Welcome to the XJO Thursday Thread
News for Today (AEST)
The XJO rose modestly on Wednesday, spread remained on the narrow side and with the close in the middle, suggests there was a little supply coming in from the left. Volume (value traded) however, remained below average, so while there was a little supply present, it was not enough to completely thwart the upward progress.
So far each time the Index has broken above the longer term 5483 level, it has met with supply and been beaten down again. Each time it breaks above that level it should weaken (by absorption) the supply sitting up there, and the recent pull back should serve as a shakeout of the zone, further enhancing the success of the breakout.
Whether this latest breakout above 5483 will meet with the same fate as earlier attempts remains to be seen, although as it has been rising on low volume recently, which suggests that the supply present is much reduced compared to previous efforts.
A retest of the 5483 level may come at some time, which the bulls would hope will now provide a level of support to the market.
With de-dollarization escalating and Chinese officials now openly calling for “a new and more efficient system,” specifically one which is not dominated by the US and the dollar, it appears the day of a rebalancing is approaching more rapidly than most would like to believe. On the heels of the vice president of China’s central bank commenting that “renminbi will become the reserve currency” we thought it time to look at the long-run history of the Chinese currency and its rapidly rising internalization efforts. As Simon Black of Sovereign Man noted recently, Chinese financial magazine Caijing has reported that the vice president of China’s central bank Pan Gongsheng made some rather candid remarks about the dollar and renminbi at a recent monetary seminar. Over the past several years, the dollar has lost significant ground to other currencies, in its share of international trade transactions and national reserves settlement. This means that, more and more, people around the world are dealing in currencies other than US dollars when they trade with one another....
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