Price is stalling at a key level of overhead supply—a zone where sellers have stepped in before.
And that's not something we can ignore. Every time we've been here, a broad group of currencies start to weaken relative to the dollar.
That matters. These emerging market currencies are risk assets. They help drive the performance of international equity markets.
We've seen this story before.
The last two times CEW hit this ceiling, ex-US equities struggled. That's the historical context behind this level—and why we're paying attention.
So what's next?
Is the dollar gearing up for another leg higher, pressuring risk assets in the process?
Or is this just a healthy pause before EM currencies break out, providing a fresh tailwind for international equities?
We're leaning for the latter: a digestion phase before a major breakout in the riskiest corners of the world.
Either way, this isn't just a currency story—it's a global risk sentiment story. And the next move from here could help set the tone for markets in the weeks ahead.
