Bearish Divergence Between DXY US Dollar Index & RSIThe DXY is butting up against a zone of significant resistance, and a bearish divergence between the index and the relative strength index suggests that buying pressure is fading here. A sharp correction in the dollar could have significant implications for gold, silver and other commodities.
Today we saw a rally in the DXY on a safe haven bid following news of escalation in Ukraine. If a major conflict between NATO and Russia really does break out, investors may learn the hard way that fiat currencies in fact do not make the best safe havens.
Dollar
Navigating the Gold Market: Tips for Investors
Gold, often hailed as a safe-haven asset, is increasingly finding itself at the mercy of two powerful forces: China and the U.S. dollar. As these two economic giants influence global markets, their actions have a direct impact on the price of gold.
China's Growing Appetite for Gold
China's insatiable demand for gold has been a significant driver of the yellow metal's price. The country's burgeoning middle class, coupled with its cultural affinity for gold, has fueled a surge in gold consumption. This demand is not limited to jewelry; it extends to investment purposes as well.
China's central bank, the People's Bank of China (PBOC), has also been a major buyer of gold. By diversifying its foreign exchange reserves, the PBOC aims to reduce its reliance on the U.S. dollar and mitigate risks associated with geopolitical tensions. As China continues to accumulate gold, it exerts significant influence over the global gold market.
The Dominance of the U.S. Dollar
The U.S. dollar, as the world's primary reserve currency, holds immense sway over the global economy. Its value relative to other currencies, often referred to as the "dollar index," has a significant impact on the price of gold.
When the dollar strengthens, it typically leads to a decline in the price of gold. This is because gold is priced in U.S. dollars. As the dollar appreciates, it becomes more expensive for foreign investors to purchase gold, which can dampen demand and put downward pressure on prices.
Conversely, when the dollar weakens, gold often appreciates. A weaker dollar makes gold more affordable for foreign buyers, stimulating demand and driving up prices.
The Interplay Between China and the U.S. Dollar
The interplay between China's growing demand for gold and the strength of the U.S. dollar creates a complex dynamic that can impact the price of gold.
• Competing Forces: China's demand for gold can support prices, while a strong U.S. dollar can exert downward pressure.
• Geopolitical Tensions: Geopolitical tensions between the U.S. and China can exacerbate market volatility and impact the price of gold.
• Global Economic Conditions: Global economic conditions, such as inflation, interest rates, and economic growth, can also influence the demand for gold.
The Future of Gold
The future of gold remains uncertain, but China and the U.S. dollar will continue to play a significant role in shaping its price. As China's economy grows and its influence on the global stage increases, its demand for gold is likely to remain strong.
However, the strength of the U.S. dollar will also be a key factor. If the dollar strengthens significantly, it could put downward pressure on gold prices. Conversely, a weakening dollar could support gold prices.
In conclusion, gold's future is intertwined with the economic and geopolitical landscape. While it remains a valuable asset, investors should carefully consider the impact of China and the U.S. dollar on its price. Diversification and a long-term investment horizon may be prudent strategies for those seeking exposure to gold.
Additional Factors Affecting Gold Prices
• Inflation: Gold is often seen as a hedge against inflation. As inflation rises, the purchasing power of fiat currencies declines, making gold an attractive investment.
• Interest Rates: Higher interest rates can reduce the appeal of gold, as investors may prefer to invest in interest-bearing assets.
• Market Sentiment: Investor sentiment and market psychology can significantly impact gold prices, especially during periods of economic uncertainty.
• Supply and Demand Dynamics: Global gold production and demand can influence prices. Changes in mining production or shifts in consumer demand can affect supply and demand dynamics.
By understanding the interplay of these factors, investors can make more informed decisions about investing in gold.
EurUsd Nov 24' .. Elections Catalyst?Hey traders, welcome back to another analysis. It's been 2 years and Eurusdmay finnally break out of the range to the downside. I know you are just as excited as I am for a potential squeeze down to 1.03.. However, we must wait for confirmation and maybe a liquidity wick before anything else. Safe trading!
Please leave any feedback below or even a boost to help the channel. Ty, cheers.
-ShrewdCatFx
Gold is not Bullish...Yet...Now that we are in a new week and middle of the month we are waiting for price to show us what it wants to do on this Monday weekly open. I think they want to make a low for the week first before going bullish. So we will look for that price action to confirm first before considering anything.
DXY Strong Bullish Bias! Buy!
Hello,Traders!
DXY made a bullish
Breakout of the key
Horizontal level of 106.500
Which is now a support
Then made a retest and is
Now going up again so
We are bullish biased and
We will be expecting a
Further move up
Buy!
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Check out other forecasts below too!
BTCUSD | Trade idea
BTCUSD Performance: BTCUSD pulled back after reaching a minor top around $65,000, hitting a high of $65,103 and currently trading around $62,500.
Rate Cut Probability: The probability of a 25 basis point rate cut in September increased to 71.50% from 71% a week ago (CME Fed watch tool).
BTC ETF Inflows: BTC ETF saw an inflow of $202.51 million, with BlackRock attracting $224 million.
US Markets: NASDAQ, which has a negative correlation with BTC, is bearish but neutral for BTC. NASDAQ is trading weak ahead of Nvidia earnings; a close above 20,000 could push it to 20,500.
#DXY 1W#DXY 1W;
The Dollar, which has managed to gradually accumulate until today with the falling trend resistance in October 2022, is preparing to move upwards again.
Aside from the fact that it has tested the FVG area 2 times, we will soon find out if it will be successful in its 3rd attempt.
It would not be a surprise to see a rise up to 108-109 levels. If it exceeds these levels, the falling trend (red) above may act as resistance again.
Will the Dollar Retrace After Retail Sales Data?Macro theme:
- The dollar hovered near a one-year high ahead of today’s Oct Retail Sales report. Markets expect a 0.3% MoM increase, down from Sep's 0.4%.
- Fed Chair Jerome Powell indicated no urgency to lower rates, citing steady economic growth, a strong job market, and persistent inflation.
- According to the CME FedWatch tool, expectations for a 0.25% rate cut next month have dropped to 62.4% from 82.5% a day ago.
Technical theme:
- The market tests the one-year high area around 107.00, confluence with the 78.6% Fibonacci Extension. The index is stretched to the upside and above both EMAs, indicating a potential mean reversion.
- If DXY cannot remain above 106.35, the index may retrace further to retest 105.43.
- On the contrary, if DXY extends its gain above 107.00, the index may retest 107.78, confluence with the 100% Fibonacci Extension.
Analysis by: Dat Tong, Senior Financial Markets Strategist at Exness
U.S.Dollar Chart Update !The US dollar recently broke above its descending triangle pattern and is testing a key horizontal supply zone. While it’s challenging this resistance, a potential pullback could still occur. The Ichimoku Cloud beneath provides strong support, reinforcing the bullish structure.
Given the dollar's inverse correlation with crypto, any decisive move could significantly impact broader market trends. Stay alert to shifts in momentum as they may signal changes in the crypto landscape.
Disclaimer: This analysis is for informational purposes and is not financial advice. Always stay updated with market movements and adjust your trading strategies as needed.
You can DM us for information on any other coin.
@Peter_CSAdmin
Is the Trump Trade Fading? The sugar high from Trump’s victory may be wearing off in a few areas.
Tesla, once a post-election favorite after Elon Musk’s support of Trump’s campaign, has now reversed direction. Reports suggest that Republicans will end the $7,500 EV tax credit—a move that’s sent Rivian tumbling 9%, while Tesla is down nearly 4%.
Shares of Trump Media & Technology slid 8% today. But being a meme stock, analysis here won't tell us much. In a notable signal, the CFO and two other insiders sold over $16 million of stock in the week following the election.
Yet, the U.S. dollar remains resilient, possibly buoyed by the Cabinet picks coming out of the Trump administration. Marco Rubio’s nomination as Secretary of State suggests a tough stance on China. Known for his anti-communist positions and support for Hong Kong’s democracy movement, Rubio has advocated for tighter export controls on U.S. technology and visa sanctions against Chinese officials, hinting at a policy that may go well beyond tariffs.
Yen VS Dollar; Trade with cautionGlobal financial markets are bracing for a possible Fed rate cut. Accordingly, forex markets have priced in the anticipated rate cut. September CPI data indicated US inflation is on course towards 2%; seems like the prevailing interest rates are working.
Blackrock thinks the Fed will be cautious with a 25-bps rate cut as opposed to a 50-bps rate cut. There is also the remote possibility that the Fed will be cautious and maintain the rates. Ostensibly, it seems the markets have aggressively priced in a rate cut that has seen the dollar weaken against major currencies.
Looking at cross Yen pairs, bearish momentum is dominant in Q3 OF 2024. However, we have seen price imbalance and price inefficiency across all Yen pairs that must be corrected. For this imbalance to be corrected, we require the US Dollar to rise. All factors held constant, retaining rates or cutting rates lesser than expected will spook the markets and we could see the dollar strengthen against the Yen and other major global currencies.
Turning to the US Dollar index, we see a potential for further weakening before the index rises targeting 105 to 110 price levels.
The Impact of Emerging Markets on the Dollar amidst Looming TradThe recent shift in US political landscape has ignited a wave of uncertainty across global markets. A potential escalation of trade tensions with China and other key economies could have far-reaching consequences, particularly for the US dollar and emerging market currencies.
The Dollar's Uncertain Future
The US dollar, long considered a safe-haven asset, faces a crossroads. While a more protectionist stance could initially bolster the dollar's appeal, it could also trigger a chain reaction of economic consequences. Increased tariffs and trade barriers could lead to higher inflation, which could erode the dollar's purchasing power. Moreover, if the US economy weakens as a result of trade disputes, the dollar's demand as a safe-haven currency could diminish.
Emerging Markets in the Crossfire
Emerging market economies, which have often relied on exports to fuel their growth, are particularly vulnerable to escalating trade tensions. A trade war could disrupt global supply chains, increase the cost of imported goods, and reduce demand for emerging market exports. This could lead to currency devaluation, higher inflation, and slower economic growth.
Currency Pegs Under Pressure
Countries that peg their currencies to the US dollar, such as Hong Kong and some Middle Eastern nations, could face significant challenges. If the dollar weakens or strengthens significantly, it could put pressure on these currency pegs, forcing central banks to intervene to maintain the exchange rate. This could deplete foreign exchange reserves and limit monetary policy flexibility.
The Renminbi's Rising Influence
China's renminbi could emerge as a potential beneficiary of a weakened US dollar. As China continues to expand its economic influence and promote the internationalization of its currency, it could become a more attractive alternative to the dollar for global trade and investment. However, a trade war with the US could also negatively impact the renminbi, as it could lead to reduced demand for Chinese exports and capital flight.
Navigating the Uncharted Waters
To mitigate the risks associated with a potential trade war, emerging market economies may need to adopt a combination of strategies. These could include diversifying export markets, promoting domestic consumption, and strengthening financial institutions. Additionally, central banks may need to adjust monetary policy to stabilize currencies and manage inflation.
In conclusion, the potential for increased trade tensions between the US and China could have significant implications for the global economy, the US dollar, and emerging market currencies. While the full impact of these developments remains uncertain, it is clear that businesses, investors, and policymakers around the world will need to closely monitor the situation and adapt their strategies accordingly.
Dollar Index Bullish to $109! (UPDATE)The DXY is constantly rocketing up from our grey supply zone. Intense bullish momentum which is about to break above the 'pending liquidity' sitting at $107.400 - $106.500.
Break of structure of this liquidity zone will open up further upside towards our $109 target!
The Dollar is looking strong, other markets are weak.
On the weekly timeframe, the DXY (U.S. Dollar Index) is bearish.
It's showing a final jump before heading down to create another lower low.
According to this analysis, other markets might be retracing.
I'm observing XAU (Gold), BTC (Bitcoin), and US Oil (WTI Crude Oil)
For potential retracements, manage your risk and emotions before diving into trading.
This is just my viewpoint, not financial advice.