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AUDUSD: Technical Impact of Core Inflation DataThe release of core inflation rate data in the United States can impact the AUD/USD exchange rate, especially on a weekly timeframe, due to its influence on market sentiment and monetary policy expectations. Firstly, let's break down the core inflation rate. Core inflation measures the change in the price of goods and services, excluding volatile items like food and energy. It's a crucial indicator for central banks, like the Federal Reserve in the U.S., as it provides insight into the underlying inflationary pressures in the economy. When the core inflation rate in the U.S. rises, it typically signals increasing demand for goods and services, which can lead to expectations of tighter monetary policy. Central banks may respond to rising inflation by raising interest rates to cool down the economy and prevent overheating. Higher interest rates make the U.S. dollar more attractive to investors, leading to an increase in its value relative to other currencies like the Australian dollar (AUD). Conversely, if the core inflation rate in the U.S. falls below expectations or remains subdued, it may indicate weak consumer demand or excess capacity in the economy. In such cases, the Federal Reserve might consider maintaining or even lowering interest rates to stimulate economic activity. Lower interest rates can decrease the attractiveness of the U.S. dollar to investors, causing it to weaken against other currencies like the AUD. Now, let's apply this to the AUD/USD exchange rate on a weekly timeframe. When the U.S. core inflation rate exceeds expectations, it could lead to a strengthening of the USD against the AUD. Traders and investors may anticipate tighter monetary policy from the Federal Reserve, leading them to buy USD in anticipation of higher interest rates. This increased demand for USD relative to AUD can cause the AUD/USD exchange rate to depreciate over the weekly observation period. On the other hand, if the U.S. core inflation rate disappoints or falls short of expectations, it could weaken the USD against the AUD on a weekly basis. Traders and investors may interpret this as a sign that the Federal Reserve might maintain or even cut interest rates to support economic growth. Consequently, there could be increased demand for AUD relative to USD, leading to an appreciation of the AUD/USD exchange rate over the weekly timeframe. In addition to the fundamental factors discussed, the impact of the release of U.S. core inflation rate data on the AUD/USD exchange rate can align with technical analysis considerations. Technical analysis involves studying historical price movements and patterns to forecast future price movements. When considering technical factors, if the current price of the AUD/USD pair is approaching a significant resistance level on the weekly timeframe, traders may anticipate a potential reversal or pullback. This resistance level could be identified through various technical tools such as trendlines, chart patterns, or Fibonacci retracement levels. Given this technical setup, there are two possible scenarios to consider: Immediate Pullback: If the AUD/USD exchange rate is nearing a resistance level at the time of the release of U.S. core inflation data, traders may expect a direct pullback in price during the same week. This pullback could occur as traders take profits or adjust their positions in response to the resistance level, coupled with the fundamental influence of the inflation data. Bullish Momentum Followed by Pullback: Alternatively, if the AUD/USD exchange rate has bullish momentum and continues to rise after the release of U.S. core inflation data, it may temporarily break above the current resistance level. Traders might anticipate the pair reaching the next resistance level before experiencing a pullback. This scenario could occur if market participants interpret the inflation data as less hawkish than expected or if other factors, such as risk sentiment or economic indicators, support bullish AUD/USD movement.
Short
by DNP-FX
2
DXY(Dollar Index):🟢Possible scenarios🟢(Details on caption)Well hello, traders. Here is my view on the DXY daily chart. As you can see the price left the buy-side liquidity which formed as an equal high, and then respected to the 50% of bullish FVG which is internal range liquidity. In this condition usually, the price seeks to the external range liquidity. So the first scenario is bullish and I follow this scenario (High probability scenario) The second scenario is bearish, if the price respects the bearish order block or mean threshold of this order block we will see the price move down. All in all, if the bearish order block can not hold the price we will see a bullish week, and if the price respects the bearish order block the weekly candle will be bearish. 💡Wait for the update! 🗓️01/05/2024 🔎 DYOR 💌It is my honor to share your comments with me💌
TVC:DXYLong
by VahidTradingCR
1
The Dollar(DXY): Charting the Path to Bullish MomentumGreetings Traders, I'm observing a sustained bullish institutional order flow in the Dollar, targeting the weekly and monthly buy stops as my buy-side objectives. Currently, we're operating within discount prices, having rebalanced the daily discount Fair Value Gap (FVG) and tapped into the mitigation block, a zone of institutional support. Additionally, price has respected the rejection block and provided a market structure shift, signaling a potential continuation to the upside. Watch the DXY & GBPUSD Weekly Outlook Video: Feel free to leave any questions you may have. Best Regards, The_Architect
TVC:DXYLong
by The_Archi-tect
2
DXY observations (short term bearish trend)DOLLAR OBSERVATIONS As price continues its downward trajectory, it has shifted its trend to the downside, leaving behind clear supply zones. One of these zones was previously identified and respected as per last week's forecast. I anticipate this short-term bearish trend to persist until it reaches the 104.200 mark. At that point, I expect a bullish reversal to occur, especially considering the presence of an imbalance just above this level. Additionally, with price currently in a downtrend, my bullish biases on GU and EU align accordingly. This correlation is logical until either of them reaches the supply zone on the daily chart, which should coincide with the same daily demand zone marked out on DXY.
TVC:DXYShort
by Hassan_fx
The TREND is your FRIEND 21 $Trillion incoming. #Fiat #dxyM2 is a classification of money supply. It includes M1 – which is comprised of cash outside of the private banking system plus current account deposits – while also including capital in savings accounts, money market accounts and retail mutual funds, and time deposits of under $100,000. Governments are not shying away from negative rates and printing money. This is akin to a Financially Transmitted Disease. As a result of this incredible money printing in the United States, the U.S. dollar is under siege. Commercial traders are net short nearly 26 thousand contracts the most since 2019. This means that investors are betting against the US Dollars at levels not seen in years.
FRED:WM2NSLong
by BallaJi
FTSE 100 Can 2.5X versus the GBP In Dollar terms. We have analysed the FTSE100 #UKX the GBPUSD and UK Housing on a big time frame scale before. Here we have the FTSE 100 and the UK companies which have pricing power versus #Sterling which we know is heading to sub $1 As we have expectations of the #GBPUSD to target 0.71 in a head and shoulders target close to a 50% drop from current levels! British citizens are living in a inflationary nightmare. A potential lifeboat is investing their way out. NOT SAVING .. as saving in a ever worthless #Pound is only compounding your loss of purchasing power.
TVC:UKXLong
by BallaJi
2
Shorting DXY: A Calculated Gamble on a Weaker DollarShorting DXY: A Calculated Gamble on a Weaker Dollar, But Beware the Dragons The DXY, or US Dollar Index, measures the greenback's strength against a basket of major currencies. With rising global tensions and a potential shift in global power dynamics, the question lingers: is it time to short the DXY, betting on a weakening dollar? Let's explore the arguments for and against this strategy. The Case for Shorting DXY: A Multi-Pronged Approach • America's Shrinking Lead: The US, while still a dominant economic force, faces challenges. Its manufacturing base has shrunk, its national debt is ballooning, and infrastructure crumbles. These factors could erode confidence in the dollar's long-term stability. • The Rise of the Rest: China's economic power is undeniable. The yuan's internationalization efforts are gaining traction, potentially chipping away at the dollar's dominance as the world's reserve currency. Other economies like the Eurozone are also maturing, offering alternatives. • A Concerted Effort: Imagine a scenario where the US's major allies, concerned about American dominance, decide to weaken the dollar. This could involve measures like central banks diversifying reserves away from the US or pegging their currencies to a basket that excludes the dollar. While a hypothetical scenario, it can't be entirely dismissed. China: The Dragon in the Room China's displeasure with a weakening dollar is a significant risk factor. A weaker dollar makes Chinese exports more expensive, hindering their economic growth. China holds a significant amount of US Treasuries, and a devalued dollar would erode the value of those holdings. This could lead to China dumping US Treasuries, further weakening the dollar in a vicious cycle. Beyond China: Other Considerations • US Response: The US Federal Reserve has tools at its disposal to counter a weakening dollar. Raising interest rates, for instance, could entice investors back to the dollar for higher yields. • Global Instability: A devalued dollar could create global economic turmoil as countries scramble to adjust exchange rates and inflation spikes. This could be particularly damaging for developing economies. • Unpredictable Markets: Shorting any asset is inherently risky, and the currency market is especially volatile. Unforeseen events can drastically alter currency valuations. So, Should You Short DXY? The decision to short DXY depends on your risk tolerance and investment goals. Here's a breakdown: • For Aggressive Investors: If you believe in a long-term decline of the US dollar and have a high tolerance for risk, shorting DXY could be a potential strategy. However, careful risk management is crucial. • For Cautious Investors: The potential consequences of a weakening dollar, particularly China's reaction, are significant. It might be wiser to stick with less volatile investments or consider options strategies that limit your downside risk. Alternative Strategies Instead of shorting DXY directly, consider these alternatives: • Invest in a Diversified Currency Basket: Spread your risk by investing in a basket of major currencies, potentially benefiting from a weakening dollar while mitigating some of the risk. • Look to Emerging Markets: If you believe in the rise of other economic powers, consider investing in their currencies or stocks poised to benefit from a weaker dollar. The Final Bite The future of the US dollar is uncertain. A combination of factors could lead to its decline. However, the potential consequences, particularly China's response, are significant risks to consider. Carefully weigh the arguments before taking a short position on DXY. Remember, diversification and a measured approach are key in navigating the ever-fluctuating currency markets.
TVC:DXY
by bryandowningqln
Gold analyse 08/05/2024 OANDA:XAUUSD 1/ US Fed's Interest Rate Stance: Neal Kashkari's remarks on maintaining a high interest rate amidst rising inflation could bolster the US dollar 2/ Middle East Tensions: Israel's limited operation in Rafah has stalled the upward momentum of gold prices, indicating a temporary halt in geopolitical concerns 3/ Impact of Interest Rate Uncertainty: Gold prices decline amid uncertainty about central banks' plans to reduce interest rates, with the rise of the dollar further contributing to gold's fall 4/ Global Debt Levels: Record-high global debt levels reaching $315 trillion could potentially raise concerns about economic stability, prompting investors to seek safe-haven assets like gold 5/ Central Banks' Gold Purchases: The substantial increase in gold purchases by global central banks, exceeding 1,000 tons in a year, suggests a hedging strategy amid economic uncertainties, potentially reflecting concerns about currency stability 6/ Perception of Central Banks' Confidence: The significant gold acquisitions by central banks could indicate a loss of confidence in traditional currencies, prompting investors to reevaluate their portfolios
OANDA:XAUUSDLong
by TraderFa9ir