Oil intermarket: DXY better offered, oil to recover to $50.00 on Bremain?
Markets across all asset classes are all about the EU referendum. DXY has seen a recent decline in long positions as favouritism is tilted to a Bremain outcome while the US dollar's safe haven status begins to lose value as investors begin to back riskier plays across the board.
A pickup in demand can be seen through the 30y US yields picking up form 2.40 recent 2016 lows to 2.52 while the S&P 500 has recovered from 2071 lows from earlier this week, albeit fading away back from the highs of 2097 overnight to 2085 currently.
A continuation of risk-on markets and a potential of an unwinding in dollar longs, DXY could extend losses below 93 and 2016 lows, especially if the market focuses back on the Fed's game changer of late, giving the green light to oil bulls to challenge 2016 highs of $51.59. Should there be a Brexit, sharp decline in commodities would be expected, exposing $45.80 key level.