DXY oct 23, 2023
While many are expecting a more pronounced decline of DXY I am actually expecting more upside.
Here is why:
- Will start with a current price position from the monthly and will travel on to smaller timeframes as we move along.
- Monthly
- On the monthly DXY has broken out of a Bullish Flag structure it had formed from Dec 22- Aug 23
- Showing an energetic displacement upwards in the month of September and closing above Nov 22 lows
- Why is this important at least in the Monthly timeframe?
This is important since this month we have not seen any attempt to rebalance to the downside.
You would probably say that the month of October is not over yet, and you are right.
So we wait to see if Dollar has any intention of rebalancing tot he downside.
Until it closes the Month we will continue on lower timeframes to see what we find
- Weekly
- We are currently on the third week of October 23.
- So far we have come close to Sep 23 lows but have not breached it.
- In order to consider a Bearish trend we need to see Higher Lows and Lower Lows.
- We have witnessed a couple of Higher Lows without producing any Lower Lows.
- Last week we have a Higher Low to be exact.
Lets continue on lower timeframes
- Daily
- Here we start seeing a clearer picture of current movement and direction at least.
- On the Daily it shows the considerable displacement made by DXY on Oct 12, 23
- Also the follow up consolidation above this displacement area.
- What do we know about this consolidation?
- They have created lower lows via wicks yet all of the candles bodies have remained above 105.780
- This is important because it shows price inability or unwillingness to go lower.
- This indicates to me further upside for Dollar (DXY
What does that mean and why am I looking at DXY when I trade Futures (ES, NQ, GC, YM)?
The US dollar is inversely correlated to the tickers mentioned above.
Meaning that a Bullish Dollar = Bearish Equities.
Also Bullish Dollar = Bearish all its inversely correlated pairs like the EUR/USD
This is why I place so much importance on the direction of DXY (US dollar) even tho I do not like to use indicators it does not mean I won’t collect data from different sources in order to get confirmation.
And one of the most reliable sources of directional data that I have come to rely on in my trading career has been DXY.
While many are expecting a more pronounced decline of DXY I am actually expecting more upside.
Here is why:
- Will start with a current price position from the monthly and will travel on to smaller timeframes as we move along.
- Monthly
- On the monthly DXY has broken out of a Bullish Flag structure it had formed from Dec 22- Aug 23
- Showing an energetic displacement upwards in the month of September and closing above Nov 22 lows
- Why is this important at least in the Monthly timeframe?
This is important since this month we have not seen any attempt to rebalance to the downside.
You would probably say that the month of October is not over yet, and you are right.
So we wait to see if Dollar has any intention of rebalancing tot he downside.
- Weekly
- We are currently on the third week of October 23.
- So far we have come close to Sep 23 lows but have not breached it.
- In order to consider a Bearish trend we need to see Higher Lows and Lower Lows.
- We have witnessed a couple of Higher Lows without producing any Lower Lows.
- Last week we have a Higher Low to be exact.
- Daily
- Here we start seeing a clearer picture of current movement and direction at least.
- On the Daily it shows the considerable displacement made by DXY on Oct 12, 23
- Also the follow up consolidation above this displacement area.
- What do we know about this consolidation?
- They have created lower lows via wicks yet all of the candles bodies have remained above 105.780
- This is important because it shows price inability or unwillingness to go lower.
- This indicates to me further upside for Dollar (DXY
The US dollar is inversely correlated to the tickers mentioned above.
Meaning that a Bullish Dollar = Bearish Equities.
Also Bullish Dollar = Bearish all its inversely correlated pairs like the EUR/USD
This is why I place so much importance on the direction of DXY (US dollar) even tho I do not like to use indicators it does not mean I won’t collect data from different sources in order to get confirmation.
And one of the most reliable sources of directional data that I have come to rely on in my trading career has been DXY.
