At the moment the USD is significantly overbought and could roll over at any moment. For now however what is more likely is a simple pullback and then continuation higher. As the Fed is determined to raise rates and inflation seems to be pretty high, the USD could appreciate even more and the US is very dominant. Maybe a stock market correction or a change in direction by major central banks do have an impact on the DXY, but the current trend is still up, although the USD could fall to as low as 93.9 before continuing higher.
Maybe we get a pullback as rates have gone up significantly without the Fed having even started to raise rates yet. Maybe the rally we've gotten up until now is already overdone as the market has priced in the rate hikes. Maybe the market hasn't priced in some of the rate hikes, but the reality is that it is already ahead.
The US 10Y yield had lost all its gains relative to other countries since mid 2013, from end of Nov 2018 until the huge oil crash in Apr 2020. Then rebounded all the way up to the point where its collapse hard started in Feb 2020 and then pulled back again. Now consolidating but with no clear direction yet. A lot will be determined on rates in my opinion, however that isn't the only reason the USD could go up or down. At the same time we have a lot of people chasing safe US liquid assets while USD denominated debt is sky high, and higher inflation that isn't caused money printing is doing a lot of damaged to those that hold a lot of USD debt.
Maybe we get a pullback as rates have gone up significantly without the Fed having even started to raise rates yet. Maybe the rally we've gotten up until now is already overdone as the market has priced in the rate hikes. Maybe the market hasn't priced in some of the rate hikes, but the reality is that it is already ahead.
The US 10Y yield had lost all its gains relative to other countries since mid 2013, from end of Nov 2018 until the huge oil crash in Apr 2020. Then rebounded all the way up to the point where its collapse hard started in Feb 2020 and then pulled back again. Now consolidating but with no clear direction yet. A lot will be determined on rates in my opinion, however that isn't the only reason the USD could go up or down. At the same time we have a lot of people chasing safe US liquid assets while USD denominated debt is sky high, and higher inflation that isn't caused money printing is doing a lot of damaged to those that hold a lot of USD debt.
