DXY - 48hrs
The public verbal argumentative exchange of blows over future interest rate cuts has been underway since Wednesday, while the last public US Federal Reserve meeting. On Friday, New York Fed President John Williams gave an imaginary cold shower to interested financial market participants who were already speculating on interest rate cuts as if on a caffeine overdose. Because he told CNBC on Friday that the Fed would even be open to further tightening if inflation trends reversed. However, he also agreed that inflation is trending downwards. But warned that “the data can move, and in surprising ways. Therefore, it is premature to even think about a rate cut in March”. What many trusted and/or competent observers ridiculed as a clown show, I see not only as a cold shower, but also as an indirect, unspoken warning to the foreign exchange market and/or US government bond market. As both the US dollar and US yields fell above average in daily trading on both Wednesday and Thursday. So it doesn't surprise me that both the US dollar and US yields rose again on Friday. While the US stock market temporarily fell. But it closed with a plus in Friday trading. What I'm getting at is the fact that his comment contradicted the previous interpretation of price action (falling US dollar and/or a falling US yield curve, accompanied by rising US stock markets). So the crucial question now seems to be whether a sufficiently restrictive monetary policy course has been adopted to push inflation back to 2% and/or even less. It is possible that interest rates will fall next year. But it depends on the data. On Wednesday evening, the US Federal Reserve kept its key interest rates stable - and most financial market participants around the world have since assumed that interest rates will fall over the course of 2024. New Fed projections suggest interest rate cuts totaling 0.75 percentage points. According to Federal Reserve Chairman Jerome Powell, the timing of a possible interest rate cut was also discussed for the first time. Which meant that both DXY and US yields fell while US stock markets shot up. However, there was no concrete signal for a rate cut. And I think that's exactly what FED New York President John Williams politely wanted to tell us on Friday! Or? The market reactions were clear after the interest rate meeting. According to Williams, the reaction did not correspond to the Fed's projections. Which is why, according to Williams' statements, not only did the US dollar gain significantly, but the US yield curve also became more expensive again.
3 complementary short informative videos worth seeing
CNBC Video
Fed Chair Powell: We're at or near the peak rate for this cycle
CNBC Video
New York Fed President John Williams: We aren’t really talking about rate cuts right now
CNBC Video
A March rate cut is premature and market’s have priced in too quickly, says IBM’s Gary Cohn
DXY - Another 48hrs.
After we tried to understand the whole picture the day before yesterday, and yesterday I tried to make the meaning of the 92,630 points and/or 88,253 points clear, today I would like to go to the 103,820 points in the candlestick daily charts to draw attention. The 103,820 points are, in the historical context, very important because they are the preliminary high from January 2017 - after the low at 70,698 (March 2007) and/or high at 114,778 (September 2023). And these 103,820 points were defended mercilessly by the bears last week, for the reasons I have just tried to describe, if I am not mistaken. The DXY ended this week with 102,954 points - a weekend closing price not seen since the beginning of August 2023. But back in summer this year 2023 most of us, me too (by the way), were still completely bullish “higher for longer”! Or?
Whatever. Trading the DXY below 103,820 confirms a medium-term sideways trend phase as long as the DXY should trade above 92,630 points. A fall below this would make the historical bullish trend reversal pattern obsolete again. And trading below 88,253 points even confirms a medium-term bearish trend reversal formation. But that's not all! It will be even more exciting. Because the DXY is currently trading within 102,992 points and/or 94,650 points. What is the March high of 2020 and/or March low of 2020 - at the time of the global corona virus pandemic. Which in turn is of exciting importance, because the 40-year trend of falling yields in the usa was also happening more or less at the same time. And this also raises the question of whether interest rates will ever be reduced below 2% again? I don't think so - based on experience since 2008! But it is now clear that the US key interest rate will fall sooner or later in 2024. But it's not clear to me to what extent this affects the DXY. Which is why I'm currently paying the most attention to the March high of 2020 and/or the March low of 2020, of 102,992 points and/or 94,650 points. Because we have such a historical comparison - both the current FED monetary policy and the current US stagflation (in a historical context) - how the DXY could continue.
The short-term recovery rally “higher for longer”, from mid-July 2023, with 99,578 points, to 107,348 points, at the beginning of October 2023, is likely to more or less implode in the first half of 2024 if the current trend does not reverse! Why should the DXY start to rise? At least next days and/or next weeks? Regardless of this, the fact that the DXY also formed something like a trend reversal pattern above the 200 SMA (Simple Moving Average). What is also very interesting in the whole context, if i am not wrong. And closed into this weekend below the 200 SMA again. The current closing price is 102,594 points. So that the DXY is currently trading between the March 2020 high of 102,992 points and/or 94,650 points, the March low of 2020. And if the bearish trend continues, we can assume that the DXY will initially trade around the annual lows of this year 2023 in the first quarter of 2024; which are 100,820 points, 100,788 points, and/or 99,578 points.
may the price action be with you:
aaron
The public verbal argumentative exchange of blows over future interest rate cuts has been underway since Wednesday, while the last public US Federal Reserve meeting. On Friday, New York Fed President John Williams gave an imaginary cold shower to interested financial market participants who were already speculating on interest rate cuts as if on a caffeine overdose. Because he told CNBC on Friday that the Fed would even be open to further tightening if inflation trends reversed. However, he also agreed that inflation is trending downwards. But warned that “the data can move, and in surprising ways. Therefore, it is premature to even think about a rate cut in March”. What many trusted and/or competent observers ridiculed as a clown show, I see not only as a cold shower, but also as an indirect, unspoken warning to the foreign exchange market and/or US government bond market. As both the US dollar and US yields fell above average in daily trading on both Wednesday and Thursday. So it doesn't surprise me that both the US dollar and US yields rose again on Friday. While the US stock market temporarily fell. But it closed with a plus in Friday trading. What I'm getting at is the fact that his comment contradicted the previous interpretation of price action (falling US dollar and/or a falling US yield curve, accompanied by rising US stock markets). So the crucial question now seems to be whether a sufficiently restrictive monetary policy course has been adopted to push inflation back to 2% and/or even less. It is possible that interest rates will fall next year. But it depends on the data. On Wednesday evening, the US Federal Reserve kept its key interest rates stable - and most financial market participants around the world have since assumed that interest rates will fall over the course of 2024. New Fed projections suggest interest rate cuts totaling 0.75 percentage points. According to Federal Reserve Chairman Jerome Powell, the timing of a possible interest rate cut was also discussed for the first time. Which meant that both DXY and US yields fell while US stock markets shot up. However, there was no concrete signal for a rate cut. And I think that's exactly what FED New York President John Williams politely wanted to tell us on Friday! Or? The market reactions were clear after the interest rate meeting. According to Williams, the reaction did not correspond to the Fed's projections. Which is why, according to Williams' statements, not only did the US dollar gain significantly, but the US yield curve also became more expensive again.
3 complementary short informative videos worth seeing
CNBC Video
Fed Chair Powell: We're at or near the peak rate for this cycle
CNBC Video
New York Fed President John Williams: We aren’t really talking about rate cuts right now
CNBC Video
A March rate cut is premature and market’s have priced in too quickly, says IBM’s Gary Cohn
DXY - Another 48hrs.
After we tried to understand the whole picture the day before yesterday, and yesterday I tried to make the meaning of the 92,630 points and/or 88,253 points clear, today I would like to go to the 103,820 points in the candlestick daily charts to draw attention. The 103,820 points are, in the historical context, very important because they are the preliminary high from January 2017 - after the low at 70,698 (March 2007) and/or high at 114,778 (September 2023). And these 103,820 points were defended mercilessly by the bears last week, for the reasons I have just tried to describe, if I am not mistaken. The DXY ended this week with 102,954 points - a weekend closing price not seen since the beginning of August 2023. But back in summer this year 2023 most of us, me too (by the way), were still completely bullish “higher for longer”! Or?
Whatever. Trading the DXY below 103,820 confirms a medium-term sideways trend phase as long as the DXY should trade above 92,630 points. A fall below this would make the historical bullish trend reversal pattern obsolete again. And trading below 88,253 points even confirms a medium-term bearish trend reversal formation. But that's not all! It will be even more exciting. Because the DXY is currently trading within 102,992 points and/or 94,650 points. What is the March high of 2020 and/or March low of 2020 - at the time of the global corona virus pandemic. Which in turn is of exciting importance, because the 40-year trend of falling yields in the usa was also happening more or less at the same time. And this also raises the question of whether interest rates will ever be reduced below 2% again? I don't think so - based on experience since 2008! But it is now clear that the US key interest rate will fall sooner or later in 2024. But it's not clear to me to what extent this affects the DXY. Which is why I'm currently paying the most attention to the March high of 2020 and/or the March low of 2020, of 102,992 points and/or 94,650 points. Because we have such a historical comparison - both the current FED monetary policy and the current US stagflation (in a historical context) - how the DXY could continue.
- 116,080 points: High during 9/11 terrorist attacks in September 2001
- 114,778 points: Intermediate high from September 2022
- 111,310 points: Low during 9/11 terrorist attacks in September 2001
- 107.348 points: yearly high 2023 (3rd one) on 2023/01/06
- 105.883 points: b) 2nd longer yearly high 2023 on 2023/03/08
- 105.631 points: a) 1st longer yearly high 2023 on 2023/01/06
- 104.699 points: c) intermediate high on 2023/05/31
- 103,820 points: Interim high from January 2017
- 103,543 points: 52 Week SMA (Simple Moving Average)
- 102,992 points: High during CoronaVirus outbreak in March 2020
- 102,594 points: last price action
- 100.820 points: A) 1st longer yearly low 2023 on 2023/02/02
- 100.788 points: B) 2nd longer yearly low 2023 on 2023/04/14
- 099.578 points: C) yearly low 2023 (3rd one) on 2023/07/14
- 094,650 points: Low during CoronaVirus outbreak in March 2020
- 093,437 points: 13 Week Pivot High from 2021/03/29
- 092,630 points: Intermediate high from November 2005
- 089,535 points: 13 Week Pivot Low 2021/05/24
- 089,209 points: 13 Week Pivot Low from 2021/01/04
- 088,253 points: Intermediate low from February 2018
- 070,698 points: Interim low from March 2008 - also a historic low
The short-term recovery rally “higher for longer”, from mid-July 2023, with 99,578 points, to 107,348 points, at the beginning of October 2023, is likely to more or less implode in the first half of 2024 if the current trend does not reverse! Why should the DXY start to rise? At least next days and/or next weeks? Regardless of this, the fact that the DXY also formed something like a trend reversal pattern above the 200 SMA (Simple Moving Average). What is also very interesting in the whole context, if i am not wrong. And closed into this weekend below the 200 SMA again. The current closing price is 102,594 points. So that the DXY is currently trading between the March 2020 high of 102,992 points and/or 94,650 points, the March low of 2020. And if the bearish trend continues, we can assume that the DXY will initially trade around the annual lows of this year 2023 in the first quarter of 2024; which are 100,820 points, 100,788 points, and/or 99,578 points.
may the price action be with you:
aaron
