DXY
Trading Bias Medium-Term: Bullish / Slightly Neutral
*TA Notes: Price within an important resistance area + confluence with several key Fibonacci levels + RSI divergence*
US Dollar is at an important area on the price chart. Whereas broad financial data is still quite favourable for the US with continued strong performance over several economic KPIs, there is still the lingering concern of macro geopolitical tensions that may weigh on the greenback. Ultimately however, currency trading is about relative strength and weakness. The bottom line here, is that there isn't much positive news on the horizon with regards to an embattled Eurozone. The impending showdown between Italy and Brussels should resolve itself in short order, but even then overall growth seems to have slowed. The expectation should still be for continued USD strength and relative outperformance in the medium-long term.
How does this play in with the charts? My personal expectation is that we will see some short-term consolidation in this area between 96.04 and 97.87. Price may peek its head over this barrier, or below it, but I believe we will trade within this range for the time being until December when the FOMC will undoubtedly raise rates for the last time this year.
Trading Bias Medium-Term: Bullish / Slightly Neutral
*TA Notes: Price within an important resistance area + confluence with several key Fibonacci levels + RSI divergence*
US Dollar is at an important area on the price chart. Whereas broad financial data is still quite favourable for the US with continued strong performance over several economic KPIs, there is still the lingering concern of macro geopolitical tensions that may weigh on the greenback. Ultimately however, currency trading is about relative strength and weakness. The bottom line here, is that there isn't much positive news on the horizon with regards to an embattled Eurozone. The impending showdown between Italy and Brussels should resolve itself in short order, but even then overall growth seems to have slowed. The expectation should still be for continued USD strength and relative outperformance in the medium-long term.
How does this play in with the charts? My personal expectation is that we will see some short-term consolidation in this area between 96.04 and 97.87. Price may peek its head over this barrier, or below it, but I believe we will trade within this range for the time being until December when the FOMC will undoubtedly raise rates for the last time this year.
Comment:
As I've said I expected consolidation in this zone until the December rate hike which is now imminent.
Even if Feds raise rates, I expect DXY to fall fairly hard to at least the 50 level
Even if Feds raise rates, I expect DXY to fall fairly hard to at least the 50 level
Comment:
Comment:
*To clarify, the whole drop will not happen on Wednesday alone. This is just the anticipated reaction*
1) FOMC believes rates are nearing "neutral" status. Meaning inflation is in line/close to target. We will likely still see December hike, with 2019 being much less certain
2) Macro economic jitters remain. Despite G20 showing a brave face on global unity, Trump still dominates headlines with his... unique... approach to diplomacy and fostering trade relations
The 2nd is mostly a continuation of what we have seen so far. The 1) development is very significant and enough for me to revise my expectations of USD performance. I am now neutral-bearish instead of neutral-bullish.
Until we see a break out of this zone however, I will not give a clear long-term technical direction.