Captain_Walker

Is another US Dollar surprise coming?

TVC:DXY   U.S. Dollar Currency Index
Some saw a few weeks ago the first pump on the US Dollar . Seasoned traders know that generally first pumps north off a structure area or approximate double bottom usually fall back.

Now - the US Dollar is nothing to fool around with. It is wild and very unpredictable. This is a hefty macro-economic index - a basket of 6 currencies. It's the USD vs 6 currencies. So, you can expect wildness!

This bad boy will disrespect RSI's. When you least expect it, it will reverse. On the macro-economic time scale, it hardly follows chart formations closely (words chosen carefully). My identified kill zone is often not close to 100% correct. I expect price to bounce in, and out or under it. If you're looking for predictions this study is not for you.

Okay, so on this chart I'm showing a theory of curves at the leading edge. I'm saying this: charts do not obey the patterns we see. Patterns create a probability.

So somethings to watch:
1. Price approaching a structure zone.
2. Big retreat on first pump (no surprise there).
3. ATR on this time frame still means there is a switch for the north.
4. Theory of curves plus all the above suggest (not predict) that there may be further north side.

As I always say, I do not know what price will do! This chart has value for those who dare to lose! Lose? Yes - you can't make money in trading unless you are prepared to lose. How much you lose is up to you - not the chart. Please. Please note this always.

Ahhh.. but hold on. Am I saying that anybody has to trade this index? I am not! The value in watching the US Dollar index is in other markets e.g. forex pairs with USD in them, stock indices, commodities and metals. What about cryptos? They don't like a strong USD. That doesn't mean that cryptos are bound to die just because the Dollar index moves north. It means there can be heavy bearish pressure. Loads of the Big Boys were hedging the crashing USD with Bitcoin - in preference for Gold . (In fact at one stage BTC was 40x that of Gold ).

But if one wants to trade this index going long, my experience is that one has to be fortunate enough to find a >1 hr trend heading north. Macro-traders can enter this market on a 3D time frame. They've got zillions to burn. You ain't.

The Big Boys have the muscle and they can wait a long time. As economies the world over open up - as projected - one can expect high demand for USD. If that happens the Dollar index heads north. I don't know when.

So there are a number of different ways to view and value the gyrations of the US Dollar index .

Disclaimer: This is not advice or encouragement to trade securities or any asset class. This is not investment advice. Chart positions shown are not suggestions and not intended to assure you of an advantage. No predictions and no guarantees are supplied or implied. The author trades mostly trend following set ups which has a low win rate of approximately 40%. Heavy losses can be expected if trading live accounts or investing in any asset class. Any previous advantageous performance shown in other scenarios, is not indicative of future performance. If you make decisions based on opinion expressed here or on my profile and you lose your money, kindly sue yourself.
FED balance sheet 42% of GDP @ 2020-01-26. Does money have value anymore? [Different perspective on the virus https://youtu.be/NjTdvALChwk ]

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