DXY 15M - 62h until "US Labour Market Data"
DXY - 48 hrs.
Not only the upcoming US elections, but also the primaries of the US Republicans for the presidential candidate in 2024, will, for better or worse, after the monetary policy of the FED, more or less, be the most decisive factors for further price action DXY! Or? If you follow me every day, then you know that I always basically assume an ambivalent correlation and/or price action expectations between the DXY, the US10Y and/or the SP500. And based on this hypothesis, we should not ignore that the euphoria on Wall Street, in New York, i.e. on the us stock market, is above average. Because in Chicago the investors and&or traders already expecting six interest rate cuts. Although the FED only expects three in their last plot. Is that the reason why the stock market rose so sharply in the last weeks of 2023? The reason why the DXY and/or the US Yield Curve become cheaper because of this? And will we experience something like a back to regression in the first days and weeks of 2024? And if yes? Where is the corresponding price action? Of course I don't know either! But in order to give those who are interested in something like to be educated in my daily commentary about the DXY, I thought that these are the most crucial questions at the moment.
However, the majority of people who are interested in the US economy expect that we will experience something like a “soft landing” - without the US economy falling into a recession. But that is the best of all worlds, which I also expect. But I don't want to ignore another variants: There may also be fewer interest rate cuts because there will be a soft landing for the us economy. Or the recession will disappoint the markets' optimistic assumptions and call into question the current high valuations of the us markets. Because while the pessimism was huge at the beginning of 2023, there is currently gigantic Goldilocks optimism at the beginning of 2024 about the WallStreet. Also from my side - in relation to managing the us economy into a "soft landing" scenrio, thanks to the ahead rate cuts of the FED. But as far as price action is concerned, in such sceanrios even like this the opposite will often happen in the future than the majority of us financial market participants want today.
3 relevant articles worth reading from the last few days
2023/12/29 REUTERS
Yoruk Bahceli: "Higher forever? Markets see few rate cuts after 2024"
2023/12/30 BUSINESS INSIDER
Filip De Mott: "The Fed will lower interest rates under 3% as a mild recession leads to a 'soggy 2024,' UBS chief economist says"
2023/12/31 FINANCIAL TIMES
Sam Fleming: "Central banks poised for rate cuts in 2024, investors and economists predict"
DXY - Another 48 hrs.
The fight for 100 points has begun - and the USD bulls are currently taking command back!
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 traded up around 100 points in the short term.
It seems that the DXY bears seem to be running out of steam at the moment.
Maybe because the expectations of up to 6 interest rate cuts for the current year 2024 are too high! Or? As can be clearly seen in the 15 minute chart, the DXY turned around the annual low of 100,820 points (2023/02/02). To stay precise, the current last short-term low was traded at 100.617 points on Thursday, December 28, 2023 at 4:30 a.m. New York time. So, what now? Wait! Because basically we are still in an overarching medium-term downward trend in the DXY. But the momentum not only did not slow down in the short term! No - as can be seen in the chart, it is currently bullish! How bullish? That's what I'm trying to argue now (in the context of the us labor market data - ahead of us). Because I don't expect an increased US unemployment rate! This should scare many DXY bears at first, so that the DXY and/or the US Yield Curve should continue to recover in the short term. I provisionally define the short-term initial targets for the DXY bulls until the US labor market data at 102,629 points (intraday daily high of the second day after the last FED day). And/or also at 102,783 points or 102,881 points (the bearish opening GAP after the last FED day).
Be that as it may, it seems that the DXY bears have currently run too deep into the valley too quickly and/or the bulls also seem to be pushing them up again. In any case, things are likely to remain volatile until Friday, around the points just formulated in the DXY. So let's first wait for the numbers, then the reaction of the financial market, and based on that, form your own (new) (old) opinion - and act accordingly. But that then on Sunday.
may the price action be with you:
aaron
My DXY commentary is always available daily from Sunday (usually before asia trading session hours) to Thursday (usually during trading hours on Wall Street). Except on public holidays - like last time! Because some people asked me. Thank you for any public and/or private feedback! I hope after reading you will always know more than before - that is the purpose of my daily DXY comment...
Not only the upcoming US elections, but also the primaries of the US Republicans for the presidential candidate in 2024, will, for better or worse, after the monetary policy of the FED, more or less, be the most decisive factors for further price action DXY! Or? If you follow me every day, then you know that I always basically assume an ambivalent correlation and/or price action expectations between the DXY, the US10Y and/or the SP500. And based on this hypothesis, we should not ignore that the euphoria on Wall Street, in New York, i.e. on the us stock market, is above average. Because in Chicago the investors and&or traders already expecting six interest rate cuts. Although the FED only expects three in their last plot. Is that the reason why the stock market rose so sharply in the last weeks of 2023? The reason why the DXY and/or the US Yield Curve become cheaper because of this? And will we experience something like a back to regression in the first days and weeks of 2024? And if yes? Where is the corresponding price action? Of course I don't know either! But in order to give those who are interested in something like to be educated in my daily commentary about the DXY, I thought that these are the most crucial questions at the moment.
However, the majority of people who are interested in the US economy expect that we will experience something like a “soft landing” - without the US economy falling into a recession. But that is the best of all worlds, which I also expect. But I don't want to ignore another variants: There may also be fewer interest rate cuts because there will be a soft landing for the us economy. Or the recession will disappoint the markets' optimistic assumptions and call into question the current high valuations of the us markets. Because while the pessimism was huge at the beginning of 2023, there is currently gigantic Goldilocks optimism at the beginning of 2024 about the WallStreet. Also from my side - in relation to managing the us economy into a "soft landing" scenrio, thanks to the ahead rate cuts of the FED. But as far as price action is concerned, in such sceanrios even like this the opposite will often happen in the future than the majority of us financial market participants want today.
3 relevant articles worth reading from the last few days
2023/12/29 REUTERS
Yoruk Bahceli: "Higher forever? Markets see few rate cuts after 2024"
2023/12/30 BUSINESS INSIDER
Filip De Mott: "The Fed will lower interest rates under 3% as a mild recession leads to a 'soggy 2024,' UBS chief economist says"
2023/12/31 FINANCIAL TIMES
Sam Fleming: "Central banks poised for rate cuts in 2024, investors and economists predict"
DXY - Another 48 hrs.
The fight for 100 points has begun - and the USD bulls are currently taking command back!
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 traded up 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
It seems that the DXY bears seem to be running out of steam at the moment.
Maybe because the expectations of up to 6 interest rate cuts for the current year 2024 are too high! Or? As can be clearly seen in the 15 minute chart, the DXY turned around the annual low of 100,820 points (2023/02/02). To stay precise, the current last short-term low was traded at 100.617 points on Thursday, December 28, 2023 at 4:30 a.m. New York time. So, what now? Wait! Because basically we are still in an overarching medium-term downward trend in the DXY. But the momentum not only did not slow down in the short term! No - as can be seen in the chart, it is currently bullish! How bullish? That's what I'm trying to argue now (in the context of the us labor market data - ahead of us). Because I don't expect an increased US unemployment rate! This should scare many DXY bears at first, so that the DXY and/or the US Yield Curve should continue to recover in the short term. I provisionally define the short-term initial targets for the DXY bulls until the US labor market data at 102,629 points (intraday daily high of the second day after the last FED day). And/or also at 102,783 points or 102,881 points (the bearish opening GAP after the last FED day).
Be that as it may, it seems that the DXY bears have currently run too deep into the valley too quickly and/or the bulls also seem to be pushing them up again. In any case, things are likely to remain volatile until Friday, around the points just formulated in the DXY. So let's first wait for the numbers, then the reaction of the financial market, and based on that, form your own (new) (old) opinion - and act accordingly. But that then on Sunday.
may the price action be with you:
aaron
My DXY commentary is always available daily from Sunday (usually before asia trading session hours) to Thursday (usually during trading hours on Wall Street). Except on public holidays - like last time! Because some people asked me. Thank you for any public and/or private feedback! I hope after reading you will always know more than before - that is the purpose of my daily DXY comment...
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