DXY - 48 hrs.
Next year there are elections in the usa - and they already seem to be sending their shadows out!
A reporter friend of mine even said yesterday to me in a private phone call that Fed Chairman Powell had may be brought interest rate cuts into play in order to avoid having to take a public position shortly before the us election in autumn 2024. In order not to expose hisself to suspicion of influencing the election. Is it a coincidence that Powell's statements suit us president Biden, who is languishing in low polls? "If the us economy would fall into a recession, Biden would have even less chance!", he argued. Which, to be honest, I already assumed last year, 2022 yet. But in retrospect, the fear of recession was exposed as election campaign alarmism by us republicans for the midterm elections. Which I also wrongly believed at the time. So today we can assume that the Fed chief and all his co-decision-makers on the committee will aim to walk the tightrope of achieving a soft landing with one or more interest rate cuts in the first half of the year 2024. In order to “stay away” from the hot election campaign phase for the second half of 2024. However, I want to understand this writen thoughts as an hypothesis. Because political influences can hardly be measured, at least for my humble self. In cotrarian to the us stagflation (US Inflation - US GDP Annual Growth Rate). And which I consider to be one of the real reasons for the FED policy - in addition to and/or including the state of the labor market (wage development).
3 articles worth reading from the last 24 hours
CNN Business
Elisabeth Buchwald: "Here’s why the Fed thinks it can cut rates in 2024"
BNP PARIBAS Asset Management
CHI LO: "Weekly Market Update – Global monetary policy pivoting"
Reuters
Michael S. Derby: "Fed's Harker open to lowering interest rates, but not imminently"
DXY - Another 48 hrs.
The 102.377 points are groundbreaking from a short-term perspective,
because they are the daily low from Monday - and were broken lower this morning.
If you will, the 102.377 points are something like the bulls' first failed attempt to take back control of the DXY. After the FED is currently expecting 3 interest rate cuts. The first failed attempt because since this morning at 07:45 NYT the DXY was trading below again - except this morning (24 hours later) almost 2 hours again. And looking back up to the current hour, the DXY created something like an ascending triangle in the price action. And that's based on the almost Tuesday high and/or Tuesday low of 102.598 and/or 102.065 points.
Today I have drawn both the daily SMA (48) and the weekly SMA (240) in the 15 min chart.
Both indicators are also inside the ascending triangle. What we can interpret is that bulls and/or bears are waiting for a decision. And we can prove that based on tomorrow's us economic data. As is the fact that the DXY is trading a little more firmly in today's NYT trading day. And that after a small bullish GAP (between 102.142 & 102.174 points) up to almost an hour exclusively above. In some cases, for a short time, an hour above the Monday low of 102.377 points. But on today's trading day, on Wednesday, mainly below. So that the rising isosceles triangle was formed in the price action. So we can assume today that a breakout from this technical formation is likely to form tomorrow. As we will get the final Q3 GDP numbers tomorrow morning NYT. And that is likely to confirm, encourage, or even disappoint the Fed's expected interest rate cuts. Be that as it may, us inflation rose to 3.2%, 3.7% & 3.7% in the 3rd quarter of 2023 (July '23, August '23 & September '23). The GDP Annual Growth Rate in the 3rd quarter is provisionally estimated at 3.0% - and will be finally announced tomorrow. So that we can assume that us stagflation will continue to decrease in the current 4th quarter of 2023 and/or also the 1st quarter of 2024 (GDP Annual Growth Rate - US Inflation) - 0.2%, 0.7% & 0.7%. By the way, in the 2nd quarter of 2023, US stagflation (GDP Annual Growth - Inflation) was still at 2.5%, 1.7% & 0.6%. Which puts the FED plots with 3 interest rate cuts in a plausible illuminating light! Or?
However, a bullish breakout from the ascending triangle could push the DXY to 102.474 points (second upper leg of the triangle). And/or even up to 102.629 points - the daily high from Monday trading. Technically oriented, short-term scalpers might speculate on this. Yes, even up to the GAP - at 102.783 & 102.881 points. But for the reasons stated above, I tend to assume a weaker DXY. And currently expect price action towards 102.174 & 102.142 points (slightly bullish opening gap from today). And/or also towards 102.107 points (second lower point of the rising triangle) & 102.065 points (first lower point of the rising triangle). Because the opening bullish GAP, from the second day, after the FED decision last week, is already at 102.048 & 101.954 points.
may the price action be with you:
aaron
Next year there are elections in the usa - and they already seem to be sending their shadows out!
A reporter friend of mine even said yesterday to me in a private phone call that Fed Chairman Powell had may be brought interest rate cuts into play in order to avoid having to take a public position shortly before the us election in autumn 2024. In order not to expose hisself to suspicion of influencing the election. Is it a coincidence that Powell's statements suit us president Biden, who is languishing in low polls? "If the us economy would fall into a recession, Biden would have even less chance!", he argued. Which, to be honest, I already assumed last year, 2022 yet. But in retrospect, the fear of recession was exposed as election campaign alarmism by us republicans for the midterm elections. Which I also wrongly believed at the time. So today we can assume that the Fed chief and all his co-decision-makers on the committee will aim to walk the tightrope of achieving a soft landing with one or more interest rate cuts in the first half of the year 2024. In order to “stay away” from the hot election campaign phase for the second half of 2024. However, I want to understand this writen thoughts as an hypothesis. Because political influences can hardly be measured, at least for my humble self. In cotrarian to the us stagflation (US Inflation - US GDP Annual Growth Rate). And which I consider to be one of the real reasons for the FED policy - in addition to and/or including the state of the labor market (wage development).
3 articles worth reading from the last 24 hours
CNN Business
Elisabeth Buchwald: "Here’s why the Fed thinks it can cut rates in 2024"
BNP PARIBAS Asset Management
CHI LO: "Weekly Market Update – Global monetary policy pivoting"
Reuters
Michael S. Derby: "Fed's Harker open to lowering interest rates, but not imminently"
DXY - Another 48 hrs.
The 102.377 points are groundbreaking from a short-term perspective,
because they are the daily low from Monday - and were broken lower this morning.
If you will, the 102.377 points are something like the bulls' first failed attempt to take back control of the DXY. After the FED is currently expecting 3 interest rate cuts. The first failed attempt because since this morning at 07:45 NYT the DXY was trading below again - except this morning (24 hours later) almost 2 hours again. And looking back up to the current hour, the DXY created something like an ascending triangle in the price action. And that's based on the almost Tuesday high and/or Tuesday low of 102.598 and/or 102.065 points.
Today I have drawn both the daily SMA (48) and the weekly SMA (240) in the 15 min chart.
Both indicators are also inside the ascending triangle. What we can interpret is that bulls and/or bears are waiting for a decision. And we can prove that based on tomorrow's us economic data. As is the fact that the DXY is trading a little more firmly in today's NYT trading day. And that after a small bullish GAP (between 102.142 & 102.174 points) up to almost an hour exclusively above. In some cases, for a short time, an hour above the Monday low of 102.377 points. But on today's trading day, on Wednesday, mainly below. So that the rising isosceles triangle was formed in the price action. So we can assume today that a breakout from this technical formation is likely to form tomorrow. As we will get the final Q3 GDP numbers tomorrow morning NYT. And that is likely to confirm, encourage, or even disappoint the Fed's expected interest rate cuts. Be that as it may, us inflation rose to 3.2%, 3.7% & 3.7% in the 3rd quarter of 2023 (July '23, August '23 & September '23). The GDP Annual Growth Rate in the 3rd quarter is provisionally estimated at 3.0% - and will be finally announced tomorrow. So that we can assume that us stagflation will continue to decrease in the current 4th quarter of 2023 and/or also the 1st quarter of 2024 (GDP Annual Growth Rate - US Inflation) - 0.2%, 0.7% & 0.7%. By the way, in the 2nd quarter of 2023, US stagflation (GDP Annual Growth - Inflation) was still at 2.5%, 1.7% & 0.6%. Which puts the FED plots with 3 interest rate cuts in a plausible illuminating light! Or?
However, a bullish breakout from the ascending triangle could push the DXY to 102.474 points (second upper leg of the triangle). And/or even up to 102.629 points - the daily high from Monday trading. Technically oriented, short-term scalpers might speculate on this. Yes, even up to the GAP - at 102.783 & 102.881 points. But for the reasons stated above, I tend to assume a weaker DXY. And currently expect price action towards 102.174 & 102.142 points (slightly bullish opening gap from today). And/or also towards 102.107 points (second lower point of the rising triangle) & 102.065 points (first lower point of the rising triangle). Because the opening bullish GAP, from the second day, after the FED decision last week, is already at 102.048 & 101.954 points.
may the price action be with you:
aaron
