Why $$==DOLLAR==$$ Succeeds
Standing on Its Own as the World’s Reserve Currency
In 1944, delegates from 44 Allied countries met in Bretton Wood, New Hampshire, to come up with a system to manage foreign exchange that would not put any country at a disadvantage. It was decided that the world’s currencies couldn’t be linked to gold, but they could be linked to the U.S. dollar, which was linked to gold.
The arrangement, which came to be known as the Bretton Woods Agreement, established that the central banks would maintain fixed exchange rates between their currencies and the dollar. In turn, the United States would redeem U.S. dollars for gold on demand. Countries had some degree of control over the currencies in situations wherein their currency values became too weak or too strong relative to the dollar. They could buy or sell their currency to regulate the money supply.
As a result of the Bretton Woods Agreement, the U.S dollar was officially crowned the world’s reserve currency and was backed by the world’s largest gold reserves. Instead of gold reserves, other countries accumulated reserves of U.S. dollars. Needing a place to store their dollars, countries began buying U.S. Treasury securities, which they considered to be a safe store of money.
So where is the Dollar today?
With the Global Pandemic - Dynamics have changed, but will they stay that way? Or will business go back to normal for the Dollar???
In Elliott wave terms - we have plotted the DXY using software from Advanced Get - the monthly currently has two variable settings as per below;
Version 2;
This intersection is quite interesting for DXY (the Dollar) as a whole, the moon cried of the crypto arena. Gold not behaving as expected in current conditions, Oil dripping (excuse the pun)below zero this year for the first time ever... So are we seeing a transition overall, or expected to go back to normal?
Weekly Elliot wave - inside the monthly
This coupled with the current Schematic structure.
We also have a couple of key areas just above to keep an eye on.
What's your take on Dollar? will crypto/Bitcoin affect it? Will SPX keep on going, or will we see a sizable pullback this year?
BITCOIN & CRYPTO
We should see a decent pullback from these highs before a continuation up. What effect will this have on DXY?
GOLD
Will we see an increase here in Gold or is the digital gold taking over silently?
DOW JONES
Again sink or swim at this interchange? It's worth comparing some of these when making an assessment of the currency markets.
SPX - US500
With charts like this, we are more likely to moon with SPX or DJI than we are with BTC.
I would be keen to hear from traders who focus on Gold, SPX, DJI or/and Bitcoin. I don't think the alt coins are in contention for the title (yet). Feel free to add your own charts in the comments below; any global gauges? indicators or tools you like when trading these instruments?
♔♕♖♗♘♙♚♛♜♝♞♟♔♕♖♗♘♙♚♛♜♝♞♟♔♕♖♗♘♙♚♛♜♝♞♟♔♕♖♗♘♙♚♛♜♝♞♟♔♕♖♗♘♙♚♛♜♝♞♟♔♕♖♗♘♙♚♛♜♝♞♟
***Source Article - investopedia.com/articles/forex-currencies/092316/how-us-dollar-became-worlds-reserve-currency.asp
Disclaimer
This idea does not constitute as financial advice. It is for educational purposes only, our principle trader has over 20 years’ experience in stocks, ETF’s, and Forex. Hence each trade setup might have different hold times, entry or exit conditions, and will vary from the post/idea shared here. You can use the information from this post to make your own trading plan for the instrument discussed. Trading carries a risk; a high percentage of retail traders lose money. Please keep this in mind when entering any trade. Stay safe.
In 1944, delegates from 44 Allied countries met in Bretton Wood, New Hampshire, to come up with a system to manage foreign exchange that would not put any country at a disadvantage. It was decided that the world’s currencies couldn’t be linked to gold, but they could be linked to the U.S. dollar, which was linked to gold.
The arrangement, which came to be known as the Bretton Woods Agreement, established that the central banks would maintain fixed exchange rates between their currencies and the dollar. In turn, the United States would redeem U.S. dollars for gold on demand. Countries had some degree of control over the currencies in situations wherein their currency values became too weak or too strong relative to the dollar. They could buy or sell their currency to regulate the money supply.
As a result of the Bretton Woods Agreement, the U.S dollar was officially crowned the world’s reserve currency and was backed by the world’s largest gold reserves. Instead of gold reserves, other countries accumulated reserves of U.S. dollars. Needing a place to store their dollars, countries began buying U.S. Treasury securities, which they considered to be a safe store of money.
So where is the Dollar today?
With the Global Pandemic - Dynamics have changed, but will they stay that way? Or will business go back to normal for the Dollar???
In Elliott wave terms - we have plotted the DXY using software from Advanced Get - the monthly currently has two variable settings as per below;
Version 2;
This intersection is quite interesting for DXY (the Dollar) as a whole, the moon cried of the crypto arena. Gold not behaving as expected in current conditions, Oil dripping (excuse the pun)below zero this year for the first time ever... So are we seeing a transition overall, or expected to go back to normal?
Weekly Elliot wave - inside the monthly
This coupled with the current Schematic structure.
We also have a couple of key areas just above to keep an eye on.
What's your take on Dollar? will crypto/Bitcoin affect it? Will SPX keep on going, or will we see a sizable pullback this year?
BITCOIN & CRYPTO
We should see a decent pullback from these highs before a continuation up. What effect will this have on DXY?
GOLD
Will we see an increase here in Gold or is the digital gold taking over silently?
DOW JONES
Again sink or swim at this interchange? It's worth comparing some of these when making an assessment of the currency markets.
SPX - US500
With charts like this, we are more likely to moon with SPX or DJI than we are with BTC.
I would be keen to hear from traders who focus on Gold, SPX, DJI or/and Bitcoin. I don't think the alt coins are in contention for the title (yet). Feel free to add your own charts in the comments below; any global gauges? indicators or tools you like when trading these instruments?
♔♕♖♗♘♙♚♛♜♝♞♟♔♕♖♗♘♙♚♛♜♝♞♟♔♕♖♗♘♙♚♛♜♝♞♟♔♕♖♗♘♙♚♛♜♝♞♟♔♕♖♗♘♙♚♛♜♝♞♟♔♕♖♗♘♙♚♛♜♝♞♟
***Source Article - investopedia.com/articles/forex-currencies/092316/how-us-dollar-became-worlds-reserve-currency.asp
Disclaimer
This idea does not constitute as financial advice. It is for educational purposes only, our principle trader has over 20 years’ experience in stocks, ETF’s, and Forex. Hence each trade setup might have different hold times, entry or exit conditions, and will vary from the post/idea shared here. You can use the information from this post to make your own trading plan for the instrument discussed. Trading carries a risk; a high percentage of retail traders lose money. Please keep this in mind when entering any trade. Stay safe.
Related publications
Disclaimer
The information and publications are not meant to be, and do not constitute, financial, investment, trading, or other types of advice or recommendations supplied or endorsed by TradingView. Read more in the Terms of Use.