First, it was widely reported over the past weeks that the trade-weighted USD has broken through its downward trend (see chart below) late October. However, despite this trend-break, the USD continued to make new lows.
Trade-weighted USD broke through medium-term downward trend in October
First confirmation of a USD trend-reversal: EUR-USD has broken through its upward trend
CRB index is testing its medium-term upward trend
Diverging behaviour of commodity sub-indices
ICE WTI crude oil future broke through upward trend on Tuesday
DJ Euro Stoxx 50 has closed below its upward trendline
Overall, markets appear to be at interesting cross-roads and especially the commodity complex looks weak. I think that especially energy commodities trade too high amid a lack of end-demand which should result in lower prices. Therefore, I also look for a break lower in the overall commodity index. Moreover, I still remain convinced that the subdued growth environment will act as a significant headwind for risky assets in general which should become more apparent again once the wave of central bank liquidity ebbs.