DXY (daily) - hardly any impulses from outside until …
DXY - 48 hrs.
Hardly any impulses from outside until the middle of next week! Or?
The days before new year's eve and/or new year's day are usually associated with lower volatility: Sure - there are more important things than price action. Family, meeting acquaintances in person that you haven't seen for a long time, or simply switching off from your main job, including Wall Street, even the financial market. So let's take a look at the price action right away - until the FED publishes its FOMC Minutes at 08:00 CET (New York Time) on Wednesday, January 3rd, 2024. And/Or on the following Friday, January 5, 2024, when the US labor market data will traditionally come out (always on the first Friday of each month).
3 complementary articles worth reading
2023/12/22 Politico
Adam Cancryn: "How Biden allies learned to love the Fed — or, at least, dread it less"
2023/12/28 Financial Times
[url=ft.com/content/5d7851f3-ef7c-4599-8a5c-c34cecb83511
]Sam Fleming in London, Martin Arnold in Frankfurt and/or Colby Smith in Washington: "Central banks rethink forecasting after failures on inflation"
2023/12/28 Investor's Business Daily
Ed Carson: "The Federal Reserve Is Set To Slash Interest Rates In 2024. But Let's Get Real."
DXY - Another 48 hrs.
The bulls/bears fight for the 100 points may have begun?!
The 100 points in the DXY are not only of a psychologically important nature, but also due to the characteristics of the downward trend since the peak of 114.778 points on September 22, 2022. Since then, sooner or later, the DXY has become 3 times traded at medium-term low prices, which were more or less even up/down around 100 points in the short term.
All subsequent interim highs have now also been traded downwards again
so that we can currently prove from the charts that the DXY is currently trading in a short-term downward trend. Which is why I pay the most attention to the last low from 2023/07/14 (99.578 points). Because if the DXY also trades downwards, which I assume today - we always have to assume something (positive bullish? negative bearish? neutral sheep?) - in retrospect we would have formed something like a medium-term, bearish trend reversal formation. Which then, in the case of a trend confirmation, implies a further lower price action. What I'm most exciting, today. However, it's not just the sentiment that has changed, but also the scenario - that is, what drives the USD index, if you will - if you can even put it that way. I’m talking about “higher for longer”.
In the daily chart we are seeing very clear selling pressure on the DXY since the last FED meeting.
And we realize that interest rates will be cut 3 times in 2024, according to the plot of the FOMC policy makers. In Chicago, bets are already being traded on up to 6 interest rate cuts. I wouldn't go that far today - but it can be assumed that interest rates will come down in 2024! How deep? That is the crucial question. And that's why I'm pulling out the daily chart again today is due to the fact that in July of this year 2023 we already had something like selling pressure around the currently traded points. If you look at the daily chart, you can see the selling pressure in the colored ellipse - the week when the inflation rate came out, which hasn't been this low since the outbreak. 3% US inflation was also the lowest level to date - so that the current downward trend can also be justified by the expectations of the Fed's expansionary monetary policy in the future. And/Or also the short-term uptrend as a temporary short-term “higher for longer” uptrend, in a medium-term trend reversal formation that is currently forming. Which, in retrospect, was completed at under 99.578 points. And this would be proof that the DXY may have turned around in the medium term!? And that too if you use the 200 SMA?! The DXY is also currently trading below the 200 SMA. And manifested a top above it in October '23 and/or November '23. So it can be expected that we will most likely continue to trade lower points in January, in the first weeks of the new year 2024. Unless we get higher inflation rates above 3% again - with the accompanying fear of 4% - and fear of interest rates rising again. But that is now history! The FED isn't thinking about that either - on the contrary. That's why a lower score can be expected next week when the FOMC statement comes out and/or the US labor market data! If we don't experience any negative surprises?
may the price action be with you:
aaron
Hardly any impulses from outside until the middle of next week! Or?
The days before new year's eve and/or new year's day are usually associated with lower volatility: Sure - there are more important things than price action. Family, meeting acquaintances in person that you haven't seen for a long time, or simply switching off from your main job, including Wall Street, even the financial market. So let's take a look at the price action right away - until the FED publishes its FOMC Minutes at 08:00 CET (New York Time) on Wednesday, January 3rd, 2024. And/Or on the following Friday, January 5, 2024, when the US labor market data will traditionally come out (always on the first Friday of each month).
3 complementary articles worth reading
2023/12/22 Politico
Adam Cancryn: "How Biden allies learned to love the Fed — or, at least, dread it less"
2023/12/28 Financial Times
[url=ft.com/content/5d7851f3-ef7c-4599-8a5c-c34cecb83511
]Sam Fleming in London, Martin Arnold in Frankfurt and/or Colby Smith in Washington: "Central banks rethink forecasting after failures on inflation"
2023/12/28 Investor's Business Daily
Ed Carson: "The Federal Reserve Is Set To Slash Interest Rates In 2024. But Let's Get Real."
DXY - Another 48 hrs.
The bulls/bears fight for the 100 points may have begun?!
The 100 points in the DXY are not only of a psychologically important nature, but also due to the characteristics of the downward trend since the peak of 114.778 points on September 22, 2022. Since then, sooner or later, the DXY has become 3 times traded at medium-term low prices, which were more or less even up/down around 100 points in the short term.
- 100.820 points @ 2023/02/02
- 100.788 points @ 2023/04/14
- 99.578 points @ 2023/07/14
All subsequent interim highs have now also been traded downwards again
- 2023/08/23 @ 105.883 points
- 2023/05/31 @ 104.699 points
- 2023/10/03 @ 107.348 points
so that we can currently prove from the charts that the DXY is currently trading in a short-term downward trend. Which is why I pay the most attention to the last low from 2023/07/14 (99.578 points). Because if the DXY also trades downwards, which I assume today - we always have to assume something (positive bullish? negative bearish? neutral sheep?) - in retrospect we would have formed something like a medium-term, bearish trend reversal formation. Which then, in the case of a trend confirmation, implies a further lower price action. What I'm most exciting, today. However, it's not just the sentiment that has changed, but also the scenario - that is, what drives the USD index, if you will - if you can even put it that way. I’m talking about “higher for longer”.
In the daily chart we are seeing very clear selling pressure on the DXY since the last FED meeting.
And we realize that interest rates will be cut 3 times in 2024, according to the plot of the FOMC policy makers. In Chicago, bets are already being traded on up to 6 interest rate cuts. I wouldn't go that far today - but it can be assumed that interest rates will come down in 2024! How deep? That is the crucial question. And that's why I'm pulling out the daily chart again today is due to the fact that in July of this year 2023 we already had something like selling pressure around the currently traded points. If you look at the daily chart, you can see the selling pressure in the colored ellipse - the week when the inflation rate came out, which hasn't been this low since the outbreak. 3% US inflation was also the lowest level to date - so that the current downward trend can also be justified by the expectations of the Fed's expansionary monetary policy in the future. And/Or also the short-term uptrend as a temporary short-term “higher for longer” uptrend, in a medium-term trend reversal formation that is currently forming. Which, in retrospect, was completed at under 99.578 points. And this would be proof that the DXY may have turned around in the medium term!? And that too if you use the 200 SMA?! The DXY is also currently trading below the 200 SMA. And manifested a top above it in October '23 and/or November '23. So it can be expected that we will most likely continue to trade lower points in January, in the first weeks of the new year 2024. Unless we get higher inflation rates above 3% again - with the accompanying fear of 4% - and fear of interest rates rising again. But that is now history! The FED isn't thinking about that either - on the contrary. That's why a lower score can be expected next week when the FOMC statement comes out and/or the US labor market data! If we don't experience any negative surprises?
may the price action be with you:
aaron
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