DXY (15min) - after us unemployment rate is before us inflation
DXY - 48 hrs.
In the run-up to the us labor market data released on Friday, the leading us stock market index, the S&P 500, fell on the first three trading days of a year, for the first time since 2008! Omen? Hopefully not - but now, after the better than expected us labor market data, the stock market bulls are hoping that the coming us inflation rate will also be lower. So that the fear of rising interest rates silences even the last skeptic! Are there any left? I don't think so - but there is a lot at stake: the majority of traders in Chicago have lowered their expectations somewhat with the money they have invested, but still expect six interest rate cuts in 2024. 6 interest rate cuts? Not in my name! With the best will in the world, I can't imagine that today?! Because the us labor market has remained more robust as US President Joe Biden's best friends had previously expected. Now all that is happening because of the rapid and steep rise in interest rates by the FED and even lower US inflation. So that for all skeptics of the us economy competent arguments are running out!? Which, if I'm mistaken, might also be the reason why the stock market ended up slightly on friday back again - and both the DXY and/or the us yield curve didn't increase in price as much as we (including me) had previously assumed they will have, if. And so, at the beginning of the week, after important US labor market data, we find ourselves facing also important us inflation figures ahead - on Thursday, January 10th, at 8:30 a.m. (New York time).
3 articles worth reading from the last few hours
2023/01/07 CNBC News
Gabriel Cortés: "The 2023 U.S. economy, in a dozen charts"
2023/01/07 Yahoo!Finance
Vince Golle and Craig Stirling: "Easing US Core Inflation Seen Reinforcing Fed Optimism"
2023/01/07 MORNINGSTAR MarketWatch
Vivien Lou Chen: "How shifting rate-cut expectations are likely to drive markets in the year ahead"
DXY - Another 48 hrs.
The us jobs numbers were, as my humble self expected, more than good - more than the most one could have expected. But what I didn't expect, although in this case in the form of a non-expectation, was the relatively weak reaction of the DXY and/or the us yield curve. I can explain this only by saying that most people are (un)expressedly still looking at the upcoming us inflation rate - and, above all, the us stock market may perhaps understand that its expected interest rate cuts (in the form of more than 3 interest rate cuts for 2024) have been confirmed. I definitely do, in any case! If the US inflation rate does not fall significantly further, then nothing will change in the FED's expectations: 3 interest rate cuts in 2024. And everything else is "WhatAboutIsm" and/or "Jeopardy!" in the best and worst sense, from us financial market participants - excluded from FED members. Even from my humble self - from me too! Hopefully in an usefully educational way!?
However, let me continue to be honest. I don't want to deceive you in my daily, hopefully educational briefing. No - rather, remain as competent and professional as I can. And that regardless of whether Republicans or Democrats approve of one of my words, exciting, or not. And so it was more than noticeable to me that over the weekend the Bidem-Administration seemed to have an enormous interest in selling these labor market data as a success. Which I don't want to deny. Quite the opposite - in this case the point goes to the US Democrats! But I am also of the opinion that we could have avoided the whole green economic disaster under the guise of a liberal social democracy, especially when it comes to energy policy - I am a Federal Republican, in this case. And realize the whole green economics, in our so called west, as mainly catalysator for higher prices! You not? What ever you think about, i noticed also, that it was no coincidence that Treasury Secretary Yellen immediately declared on Friday that the us economy had achieved a soft landing. Which is what I'm assuming today too! But I'm already writing today that things could be different again next weekend? But it doesn't have to...
Be that as it may, that's why I'm always going out on a limb like this in the last few days because the DXY is currently, more or less, standing still. Standing still - short-term, trading sideways - after failing to make the medium-term breakout to the downside. The exciting and/or outstanding thing about it is that the technical picture can currently be put together in harmony with the us economic ticker - without being conceited. Because after reading what we just read above, look at the chart! And that before the us inflation numbers? The DXY bulls seem to have won the battle for the 100 points in the short term - but the overarching bearish medium-term downward trend is still intact. 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. Because, since then, sooner or later, the USD index became 3 medium-term Traded at rock-bottom prices, which were more or less traded up around 100 points for a short time.
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
Currently, until the us inflation rate on Thursday, the two GAPS are currently in focus after the last public FED meeting. The calm before the storm! Before the bullish or bearish price action storm towards 103 points (for all DXY bulls) or towards 100 DXY points (for all DXY bears). Which direction is it going? I don't know it! But I can very well imagine that there could be a breakout from the two GAPS by Thursday trading at the latest - and that the price action will strengthen itself due to the market's expectations. So because of the expectations of all of us involved - because we then have new facts about US inflation.
A few days ago it seemed that the medium-term DXY bears seemed to be running out of steam. 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 be 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. 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? I don't know that! But us jobs data came out better than many expected. And so since then I have had the feeling that the stock market needs even lower us inflation rates in order to continue its rally of the last few weeks. And/or both the DXY and/or the us yield curve higher consumer prices again - so that the increase of the last few days was not just a self-fulfilled autosuggestive prophecy. My mother, who has since passed away, would say it like this - who as a child always loved to read coffee grounds to me, with a wink in an eye. Because I don't expect an increased US inflation rate! But more on that on Thursday. I am provisionally defining the short-term initial goals for the DXY bulls up to the US inflation rate for the two GAPS - as hopefully clearly shown and commented on in the chart, even for non-nerds.
may the price action be with you:
aaron
My DXY commentary is always available daily from Sunday 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 or private feedback! And hopefully after reading you will always know more than before - that is the purpose of my daily DXY educational comments...
In the run-up to the us labor market data released on Friday, the leading us stock market index, the S&P 500, fell on the first three trading days of a year, for the first time since 2008! Omen? Hopefully not - but now, after the better than expected us labor market data, the stock market bulls are hoping that the coming us inflation rate will also be lower. So that the fear of rising interest rates silences even the last skeptic! Are there any left? I don't think so - but there is a lot at stake: the majority of traders in Chicago have lowered their expectations somewhat with the money they have invested, but still expect six interest rate cuts in 2024. 6 interest rate cuts? Not in my name! With the best will in the world, I can't imagine that today?! Because the us labor market has remained more robust as US President Joe Biden's best friends had previously expected. Now all that is happening because of the rapid and steep rise in interest rates by the FED and even lower US inflation. So that for all skeptics of the us economy competent arguments are running out!? Which, if I'm mistaken, might also be the reason why the stock market ended up slightly on friday back again - and both the DXY and/or the us yield curve didn't increase in price as much as we (including me) had previously assumed they will have, if. And so, at the beginning of the week, after important US labor market data, we find ourselves facing also important us inflation figures ahead - on Thursday, January 10th, at 8:30 a.m. (New York time).
3 articles worth reading from the last few hours
2023/01/07 CNBC News
Gabriel Cortés: "The 2023 U.S. economy, in a dozen charts"
2023/01/07 Yahoo!Finance
Vince Golle and Craig Stirling: "Easing US Core Inflation Seen Reinforcing Fed Optimism"
2023/01/07 MORNINGSTAR MarketWatch
Vivien Lou Chen: "How shifting rate-cut expectations are likely to drive markets in the year ahead"
DXY - Another 48 hrs.
The us jobs numbers were, as my humble self expected, more than good - more than the most one could have expected. But what I didn't expect, although in this case in the form of a non-expectation, was the relatively weak reaction of the DXY and/or the us yield curve. I can explain this only by saying that most people are (un)expressedly still looking at the upcoming us inflation rate - and, above all, the us stock market may perhaps understand that its expected interest rate cuts (in the form of more than 3 interest rate cuts for 2024) have been confirmed. I definitely do, in any case! If the US inflation rate does not fall significantly further, then nothing will change in the FED's expectations: 3 interest rate cuts in 2024. And everything else is "WhatAboutIsm" and/or "Jeopardy!" in the best and worst sense, from us financial market participants - excluded from FED members. Even from my humble self - from me too! Hopefully in an usefully educational way!?
However, let me continue to be honest. I don't want to deceive you in my daily, hopefully educational briefing. No - rather, remain as competent and professional as I can. And that regardless of whether Republicans or Democrats approve of one of my words, exciting, or not. And so it was more than noticeable to me that over the weekend the Bidem-Administration seemed to have an enormous interest in selling these labor market data as a success. Which I don't want to deny. Quite the opposite - in this case the point goes to the US Democrats! But I am also of the opinion that we could have avoided the whole green economic disaster under the guise of a liberal social democracy, especially when it comes to energy policy - I am a Federal Republican, in this case. And realize the whole green economics, in our so called west, as mainly catalysator for higher prices! You not? What ever you think about, i noticed also, that it was no coincidence that Treasury Secretary Yellen immediately declared on Friday that the us economy had achieved a soft landing. Which is what I'm assuming today too! But I'm already writing today that things could be different again next weekend? But it doesn't have to...
Be that as it may, that's why I'm always going out on a limb like this in the last few days because the DXY is currently, more or less, standing still. Standing still - short-term, trading sideways - after failing to make the medium-term breakout to the downside. The exciting and/or outstanding thing about it is that the technical picture can currently be put together in harmony with the us economic ticker - without being conceited. Because after reading what we just read above, look at the chart! And that before the us inflation numbers? The DXY bulls seem to have won the battle for the 100 points in the short term - but the overarching bearish medium-term downward trend is still intact. 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. Because, since then, sooner or later, the USD index became 3 medium-term Traded at rock-bottom prices, which were more or less traded up around 100 points for a short time.
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
Currently, until the us inflation rate on Thursday, the two GAPS are currently in focus after the last public FED meeting. The calm before the storm! Before the bullish or bearish price action storm towards 103 points (for all DXY bulls) or towards 100 DXY points (for all DXY bears). Which direction is it going? I don't know it! But I can very well imagine that there could be a breakout from the two GAPS by Thursday trading at the latest - and that the price action will strengthen itself due to the market's expectations. So because of the expectations of all of us involved - because we then have new facts about US inflation.
A few days ago it seemed that the medium-term DXY bears seemed to be running out of steam. 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 be 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. 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? I don't know that! But us jobs data came out better than many expected. And so since then I have had the feeling that the stock market needs even lower us inflation rates in order to continue its rally of the last few weeks. And/or both the DXY and/or the us yield curve higher consumer prices again - so that the increase of the last few days was not just a self-fulfilled autosuggestive prophecy. My mother, who has since passed away, would say it like this - who as a child always loved to read coffee grounds to me, with a wink in an eye. Because I don't expect an increased US inflation rate! But more on that on Thursday. I am provisionally defining the short-term initial goals for the DXY bulls up to the US inflation rate for the two GAPS - as hopefully clearly shown and commented on in the chart, even for non-nerds.
may the price action be with you:
aaron
My DXY commentary is always available daily from Sunday 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 or private feedback! And hopefully after reading you will always know more than before - that is the purpose of my daily DXY educational comments...
