Real Vision CEO Raoul Pal says economic data slated for release this week could give the crypto and stock markets a shot in the arm.
The former Goldman Sachs executive tells his 975,000 Twitter followers that he’s keeping a close watch on the US dollar index (DXY), which he notes is in the midst of a parabolic rally.
“If the dollar keeps going, it’s going to really break things. It has literally done parabolic.”
Traders often follow the performance of the DXY as a strong index suggests that investors are selling risk-on assets such as stocks and crypto in favor of the US dollar.
According to Pal, he believes the DXY will likely continue its ascent.
“There is literally nothing until 120 if we break this weak trend line… And deviation from trend suggests it can get to 120 too…”
The former Goldman Sachs executive notes the dollar’s strength could cause headaches this week for crypto and equities investors, but he argues there could be one saving grace for both sectors.
“It could cause a nasty week in risk assets. I don’t think equities make new lows, but I’m not sure of that. Same with crypto. Personally, I think we get saved by weak economic data this week.”
A number of economic data are due for release this week including the ISM manufacturing index, an indicator of US economic activity, and nonfarm payrolls, which tracks the total number of paid workers in the country.
Don't Miss a Beat – Subscribe to get email alerts delivered directly to your inboxFeatured Image: Shutterstock/DM7/S-Design1689/INelson