Should I Short USD? Yes or No? If yes, then how? If no, then why?
The question is simple, but the answer may be complicated.
Therefore, we will dive into the macroeconomics of the American economy, with consideration given the most significant factors influencing the value of USD.
> OBSERVATIONS 1) Since March 2020, USD appears to have lost approximately 13% of it's market value.
1) Supply and demand: Exporting American products and services creates demand for USD, because foreign investors must exchange their currency for USD, in order to complete the transaction.
2) Sentiment and market psychology: Rising unemployment weakens the economy, reduces income, and slows consumption. If the US economy appears weak, foreign investors may sell-off their US securities, in favor of exchanging back to their national currency.
3) Technicals: The release of government statistics (payroll data, GDP data, etc.) may help quantify whether the economy is strong or weak. Historical patterns generated by cyclical support/resistance levels and technical indicators also contribute to the movement of USD.
1) Discount rate: The interest rate reserve banks charge commercial banks for short-term loans.
2) Reserve requirements: The portions of deposits that banks must hold in cash in vaults or on deposit.
3) Open market operations: The buying and selling of U.S. government securities (T-bills, bonds, and notes).
4) Interest on Reserves: The interest paid on excess reserves held at reserve banks.
> HYPOTHESIS Shorting USD will be profitable because the Fed is increasing money supply. Shorting USD will be profitable because the Fed is maintaining interest rates near zero. Shorting USD will be profitable because the Fed is maintaining reserve requirements at zero. Shorting USD will be profitable because the Fed is repurchasing government bonds on the open market.
> EXPERIMENT Part A: Build a diversified dollar bearish portfolio. Include dollar bearish securities and commodities (FXC, FXE, UDN, GLD, IAU, DBC, DBP) Include International stock and emerging markets ETFs (open to all suggestions for this) Include foreign currencies (GBP, CAD, AUD, CNY, CHF, KRW, JPY, EUR) Include crypto currencies (BTC, ETH, LTC, and especially the DeFi sector)
> RESULTS Pending... follow me for a monthly update to see if I get rekt, much love!
Trade active
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After 620 days of observing the market, I've activated my dollar bearish strategy. In anticipation of this move, I built a full-service bitcoin mining company where you can buy and host bitcoin miners in my renewably powered crypto data centers (visit delmarva.io for details). I truly look forward to publishing the results after this strategy is closed manually. Thank you again for the opportunity to learn and grow within the tradingview community... much love!
you can tell some of these posts people just like to hear themselves talk lol
UnknownUnicorn13791118
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@charliefornia, well it's typed word on a static chart, and not video with audio commentary, so not sure I get what you're saying, but thanks for the input regardless :)
lesa666
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Think you got things all wrong ... DXY find multi year support at 89 ish region ... only fall below 88 will create lower low ... if you want to show double top on day TF that can only be 117 to 119 ... DXY is still in uptrend from 2008
Higher lows from 2008 and double bottoms are being print all the way ...
1.2008 - 71
2.2011 - 72
3.2013 - 78
4.2014 - 79
5.2018 - 88
6.2021 - 89 ... uptrend can continue from this double bottom ( we are in uptrend right now from this double bottom )
You have falling wedge that is confirming right now like in 2018 same pattern ... so be carefull with this prediction ... only fall below 88 can be bearish for DXY till then this is perfect buy oportunity with SL below 88 ...
I dont know how somebody can show this long term chart ... but only fractal of chart ...
This still strong uptrend of DXY ... gl all ... this guy dont know a thing :)
Till 120 there is no double top my friend ... just a corections ...
UnknownUnicorn13791118
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@lesa666, I tend to stray away from calling other ideas wrong. 1) it is an idea. 2) I used science. 3) the moves are cyclical. 4) TA is a tool, not a law... supply and demand however, is a law... and as long as supply is increasing (trillions in stimulus), demand is decreasing (dollar value) and this is economics 101, right?
lesa666
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@uswebdev, demand is incrising my friend, why we need stimulus if there is enough supply of usd , so we have demand for usd ... and of course pls look at exact date that what happened when first stimulus anounced in march 2020 ... dxy from 96 to 102 in two weeks ... market will react on stimulus nobody knows how ...
For first you said that is idea ... for that i dont have anything to say ... idea can be good and bad ...
Science in trading ... dont what to say : )
Your view is okay for somebody, but pls look little bit deeper in charts ... probably you will see that this can be turning point ... for usd ... ( if there is fall below 88 then we can speak about your idea ... till then you are probably missing buying oportunity ... )
Gl ...