DOLLAR (DXY): Things could get ugly next week
It's all on the charts. The Dollar does not like trenches. Zoom into chart for a better view.
This is a probabilistic estimate for a 51% chance movement north. That means there is a 49% chance of no direction north. Prediction this is not (because predictions are 100% for occurrence).
What this means is that the probability north should be factored into all instruments that are linked to the DXY strength.
Equities indices for example have been profiteering from a relatively weak dollar. It is of course possible that both equities and dollar strength head south. Possible but not likely. If that happens it will be a whole new era.
Stay safe. Don't burn cash. May the force be with you! 😁😄
This is a probabilistic estimate for a 51% chance movement north. That means there is a 49% chance of no direction north. Prediction this is not (because predictions are 100% for occurrence).
What this means is that the probability north should be factored into all instruments that are linked to the DXY strength.
Equities indices for example have been profiteering from a relatively weak dollar. It is of course possible that both equities and dollar strength head south. Possible but not likely. If that happens it will be a whole new era.
Stay safe. Don't burn cash. May the force be with you! 😁😄
Comment:
So nothing great happened for the north in the week following the chart. But am I surprised. Nope. The DXY is one of the wildest instruments out there. I did not propose trading it. It's use is in looking at other markets connected to it but weakly correlated.
Below is why one always has to look to higher timeframes, so surprises are no longer surprises.
But in the 4H timeframe we're seeing patterns suggestive of an intention to move north.
Will it move significantly north? How would I know? And I couldn't care less. The reason for my lack of care with the DXY is because I'm looking for how it orchestrates trends in other markets.
Below is why one always has to look to higher timeframes, so surprises are no longer surprises.
But in the 4H timeframe we're seeing patterns suggestive of an intention to move north.
Will it move significantly north? How would I know? And I couldn't care less. The reason for my lack of care with the DXY is because I'm looking for how it orchestrates trends in other markets.
FED balance sheet 42% of GDP @ 2020-01-26. Does money have value anymore? [Different perspective on the virus youtu.be/NjTdvALChwk ]
The DXY is a very wild instrument that sets the tone for many other markets. That is its true importance.
DXY is not well correlated with market moves on time frames less than 30 min. Larger time frames like 1 hr to 4 hrs show the orchestrating 'tone'.