2024/12/07
Another 48h - Below Annual Highs Between Downtrend Lines In DXY
“a doji week, after a bearish and/or eight bullish weeks previously!
what's next? trend tends to be bearish? or? why should dxy rise?”
IIn France, Emmanuel Macron is in a shambles after the fall of the government - just like our liberal, green, Social Democratic federal government in my home country of Germany. For better or worse, new elections will take place in Germany in February 2025, and in France too, more and more reporters on political events in France are demanding consequences - as is the majority of the population. A day after the fall of the government in France, President Emmanuel Macron has still rejected calls to resign. “You have entrusted me with a five-year mandate in a democratic way and I will carry it out to the end”, he said in a televised address on Thursday, 24 hours after a vote of no confidence toppled Prime Minister Michel Barnier's government. And announced that he would appoint a new head of government “in the next few days”. Macron accused the right-wing populists, especially Le Pen, of primarily targeting his office. “They only think about one thing, the presidential election, which they want to prepare and bring about quickly”, said Macron, referring to MPs from the right-wing populist Rassemblement National (RN) party. Their parliamentary group leader Marine Le Pen wants to run in the election and has suggested Macron resign several times in the past few days. The RN MPs “simply voted for chaos, that is the only project they have in common with the left-wing extremists”, said Macron. The fall of the government was only possible “because the extreme right and the extreme left united to form an anti-republican front”, he added. I don't want to contradict whose analysis at this point - but I would like to point out that the political pressure from the left and/or right was and is only an expression of a failed green policy, under the guise of liberal democracy - that of the majority population, since the beginning of 2010, when the first home-made euro crisis flared up, has only caused costs. Green politics is left-wing politics - even under the guise of freedom, let alone the motive of saving the climate. And left-wing policies only ever finance themselves through taxes that most people don't need - and always ends in stagflation. So at the point where costs exceed growth - and a debt spiral occurs. and from out of that states and/or governments can only grow out of (as taxpayers and/or even consumers - who everybody of any society is)! How else? Of course, Macron also knows this and announced that he would appoint a new prime minister in the next few days, who would then form a government committed to the “common good”. This should introduce a special law by mid-December to carry out government business on a basis of the 2024 budget. “A new budget law should then be drawn up at the beginning of next year 2025", said Macron. Anyway, be that as it may, a few days ago French President Emmanuel Macron described his possible resignation during a state visit to Saudi Arabia as “political fiction”. But after the fall of the government, calls for his resignation are becoming louder and louder. As a survey shows, 64 percent of French people now support such a step.
- Will the bulls recapture the terrain above 106.517 points again?
- Will the bears recapture the terrain under 104.447 points again?
Those were the two questions last calendar week - to learn something! And what have we learned? Both bears and bulls were not that strong. Looking back, I may have to admit that, for better or worse, I defined the price action a little too far apart. But I think we should give ourselves time until 2025. Even until January 20th, when Trump is officially back in the office. Because then the cards are shuffled again as far as the price action is concerned. And until then, we should continue to be content with the same question. Because the price action between 107.348 points (Annual Year High 2023 from 2023/10/03) and/or 106.517 points (1st Annual Year High 2024 from 2024/04/16) are groundbreaking. Last week before the bears took over. pathbreaking for last week, and/or this week after
DXY closed at 105.970 points this weekend, after last weekend 105.782 points. Which is why it looks like we will see a DXY down to 104.447 points from Friday, the 2024/08/02.
“At present, the developed countries condescend to the developing ones.”
George Soros
- Will the bulls recapture the terrain above 106.517 points again?
- Will the bears recapture the terrain under 104.447 points again?
It looks like we will see a
DXY down to 104.447 points from Friday, the 2024/08/02 because a price action until this price action zone and/or even below is definitely within the scope of probability. Because looking back, between the annual highs of 2024 and/or 2023, we can now see something like a bearish trend reversal formation in the DXY chart. Admittedly not as big as the bullish trend reversal formation - but at least a bearish counter reaction to the previous bullish one. And this could send the DXY even until around and/or down under 104.447 points from Friday, the 2024/08/02. When fears arose in the financial market that the US unemployment rate would skyrocket, the Fed would have to cut interest rates to prevent an US recession, and as a result, US inflation would inflate again - and we were nevertheless cyclical as history tells us still fall into a US recession. However, will it happen? It will be like it will be! And/Or allow me to use the words of El-Erian: “Fed Will Be Comfortable Cutting Rates”, as you can hear on Bloomberg Surveillance Podcast, from last Friday, as the last US unemployment rate came out.108.071 : 2024/11/22 - Annual Year High 2024
107.348 : 2023/10/03 - Annual Year High 2023
106.517 : 2024/04/16 - 1st Annual Year High 2024
106.490 : 2024/05/01 - 1st False Breakout To New High
106.130 : 2024/06/26 - 2nd False Breakout To New High
105.970 : 2024/12/06 - last price action
104.799 : 2024/07/30 - High Before W Trend Reversal Formation
104.426 : 2024/08/02 - High Of The August 2024 2 Day Sell-Off
102.160 : 2024/08/03 - Low Of The August 2024 2 Day Sell-Off
This price action was and/or is still, at least in my opinion, truly important, because share prices had already fallen on Friday, the 2nd August 2024, after the publication of the monthly US labor market figures. And the sell-off accelerated on the following Monday, both in the
USDJPY and/or on Wall Street, in the US stock markets DJIA & 
SP500 & 
IXIC incl. 
NDX . The Japanese stock market 
NI225 suffered its worst point loss ever on Monday - and the largest percentage decline since 1987. And fell as much as -12% on Monday, August 5, 2024, before recovering most of the losses on Tuesday. US indices also fell more than average on Monday, with the SP500 and IXIC closing around 3% lower. The British 
UKX and the European leading index 
SXXP each fell by 2%. And volatility indicators like the VIX were, at the time, at levels last seen during the pandemic sell-off in 2020. What happened on ths botched ays, in early August 2024? For better or worse, traders and/or investors were forced to close their derivative positions due to the US labor market data, as the USDJPY exchange rate pair continued to accelerate its downward trend from more than 160 USDJPY, which had started since July 2024. And in retrospect, this above-average fast and low price action in the USDJPY was more or less the main reason for these distortions - because the price action, as we now experience every day, is usually not that big. On the contrary - usually. However, the key to the market turbulence was and still is to be found in the monetary policy of the FED and the BOJ. After all, the circumstances that supported the record highs of the global markets this year 2024 were the high interest rates in the USA (5.25% - 5.50) and/or the low interest rates in Japan (0.25% after the interest rate hike last week before, back than in early August 2024). Traders and/or Investors were and are still able to borrow in yen, which even until the last week before the w trend reversal formation, we had in USDJPY multi-decade lows, until the start of July 2024 incl. in higher-performing dollar assets such as technology stocks NDX and/or US10Y U.S. bonds. This process, which is called "carry trade" plunged during these two days - Friday, the 2nd 2024 and/or Monday, the 5th 2024 - on fears about the U.S. economy. And so, at the beginning of August 2024, expectations changed that the US Federal Reserve would cut interest rates faster and deeper than the majority of traders and/or investors previously thought - to support the US economy. And what happens in such scenarios if you get caught on the wrong foot in terms of monetary policy? Right - the majority's expectations change! And what about the price action? Correct - that's right also. The price action also rotates! How long? How high? How low? I don`t know! But I know that, based on the latest data from the US economy, the US economy is not headed into a recession. Almost the opposite - the US economy is growing out of the self-organized US stagflation, into which it had politically organized itself with the previous Biden & Harris government of the US Democrats. Therefore, Bidenomics was nothing more than a costly green domestic adventure and/or a naive militant foreign adventure by Democrats, under the guise of liberal freedom. So that we all now find ourselves at least after four years - Biden & Harris - but with less money, less purchasing power, in our private wallets. What doesn't just only happen to Americans, much more in most countries in our so-called West. And why, for better or worse, Trump was re-elected if I'm not mistaken. Nevertheless, I remain more bullish than bearish for the DXY as long as the price action is above the w trend reversal formation. 
EURUSD is quite weak - totally damaged in terms of fiscal policy and economic policy. But the Japanese yen may strengthen as inflation in Japan did not come down as much as most expected. Which is why I closed our long USDJPY 4XSetUp with a loss at the Friday closing price on November 29, 2024.With best wishes
and with good intentions!
Aaron
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