Logistic Wealth Management - Weekly DXY Report.
Strategist - VirginiaTElphee
6/10/17
DXY
Last week the U.S. Dollar (USD) could not find the strength to move lower as expected. Prices meandered aimlessly and plenty of stops were hit including mine. Our bias is still to the down side for technical reasons on weekly/daily charts. It is note worthy that monthly charts are in mega uptrends, which will take upwards of a year and a half to start straightening out. We find the weekly/daily chart alignment to be the deal maker at least for the coming summer months.
Big News Ahead!
On Wednesday June 14 at 2pm EST. The Federal Open Market Committee (FOMC) is expected to raise interest rates from 1.00 to 1.25. This interest rate is charged to big banks in exchange for holding physical cash the public requests/can be loaned out. More cash means more spending. Higher interest rate will cause banks to hold less cash which is generally negative for the economy.
The Fed has been on track this year and we estimate a very high probability that rates go higher. It has been projected clearly by the Fed for months now. That being said we usually expect market moving data like this to be priced into the market already. Which may explain why the USD has closed flat to lower the last 2-3 weeks. For me, the real indication of pricing in this event was the massive shift in equity markets Friday evening a few hours before the close. While the S&P fell about 1% before closing flat the Nasdaq(NQ) nosedived off the side of a cliff led by AAPL. This massive shakeout of the technology sector has us slightly on edge, but the fact that NQ was up 17% YTD when the others are hardly up 5-7%, lets us know this kind of movement is typical.
Understanding the dynamics ahead of the FOMC meeting is crucial for strategic entries.
If the rates rise as expected markets should remain unchanged potentially sloshing around 1% filling orders. We believe the most likely scenario has already been priced in. In this event we will be diligently looking for long EURUSD opportunities around the 1.11 level.
If rates are unchanged, or by some fluke of nature are revised down, a major recalculation will be found in the USD to the upside (EURUSD down). Price could move to 98.5-100 levels in a hurry. While those levels are ideal in the current evaluation. The right move will be to let the market settle and see about strategic entries a couple days after. It is always possible the USD hangs around these levels with no clear direction until rates do actually rise. Hopefully that won't be the case.
Risk off definition
XXX/USD Rise
USD/XXX Falls
DXY falls with Gold
Stock Indexes Rise
Happy Trading!!!
Like/share/comment!! I love hearing others opinions/strategies/views. I'm here to grow and learn!
Strategist Tanner Elphee is a 5 year market analyst with specialties in Forex and Future markets.
Disclaimer - LWM is a fictional company at this point of time. Naming rights are not owned. The views and beliefs of current market conditions are not intended to be acted on without proper evaluation and understanding according to your own trading plan. Trade at your own risk!
Strategist - VirginiaTElphee
6/10/17
DXY
Last week the U.S. Dollar (USD) could not find the strength to move lower as expected. Prices meandered aimlessly and plenty of stops were hit including mine. Our bias is still to the down side for technical reasons on weekly/daily charts. It is note worthy that monthly charts are in mega uptrends, which will take upwards of a year and a half to start straightening out. We find the weekly/daily chart alignment to be the deal maker at least for the coming summer months.
Big News Ahead!
On Wednesday June 14 at 2pm EST. The Federal Open Market Committee (FOMC) is expected to raise interest rates from 1.00 to 1.25. This interest rate is charged to big banks in exchange for holding physical cash the public requests/can be loaned out. More cash means more spending. Higher interest rate will cause banks to hold less cash which is generally negative for the economy.
The Fed has been on track this year and we estimate a very high probability that rates go higher. It has been projected clearly by the Fed for months now. That being said we usually expect market moving data like this to be priced into the market already. Which may explain why the USD has closed flat to lower the last 2-3 weeks. For me, the real indication of pricing in this event was the massive shift in equity markets Friday evening a few hours before the close. While the S&P fell about 1% before closing flat the Nasdaq(NQ) nosedived off the side of a cliff led by AAPL. This massive shakeout of the technology sector has us slightly on edge, but the fact that NQ was up 17% YTD when the others are hardly up 5-7%, lets us know this kind of movement is typical.
Understanding the dynamics ahead of the FOMC meeting is crucial for strategic entries.
If the rates rise as expected markets should remain unchanged potentially sloshing around 1% filling orders. We believe the most likely scenario has already been priced in. In this event we will be diligently looking for long EURUSD opportunities around the 1.11 level.
If rates are unchanged, or by some fluke of nature are revised down, a major recalculation will be found in the USD to the upside (EURUSD down). Price could move to 98.5-100 levels in a hurry. While those levels are ideal in the current evaluation. The right move will be to let the market settle and see about strategic entries a couple days after. It is always possible the USD hangs around these levels with no clear direction until rates do actually rise. Hopefully that won't be the case.
Risk off definition
XXX/USD Rise
USD/XXX Falls
DXY falls with Gold
Stock Indexes Rise
Happy Trading!!!
Like/share/comment!! I love hearing others opinions/strategies/views. I'm here to grow and learn!
Strategist Tanner Elphee is a 5 year market analyst with specialties in Forex and Future markets.
Disclaimer - LWM is a fictional company at this point of time. Naming rights are not owned. The views and beliefs of current market conditions are not intended to be acted on without proper evaluation and understanding according to your own trading plan. Trade at your own risk!
Comment:
If any investment bankers/Trading desks/exchanges need an assistant, I am available after my college studies. XD
