💾 U.S. Dollar Index & Bitcoin/CryptocurrencyInverse correlation to Bitcoin.
When this drops, Bitcoin goes up or so people say but it works at least on the short-term.
The U.S. Dollar Index (DXY)
Here we have some mixed signals in the short-term, which is the same I noticed with some of the charts I shared yesterday.
Short-term, very short as in the 1H, 4H and Daily timeframe, I see a potential bounce taking place but very weak.
A potential for a bounce but the overall technicals are bearish.
That's the mixed part, the fact that a bounce (up) can develop.
Long-term, as in the Weekly and Monthly timeframes, the signals are clear. Bearish.
- Last week session closed as a full red candle; third week red in a row.
- This was a rejection of EMA10, EMA21 and EMA50, the weekly DXY now trades below all these levels.
- The RSI is below 50 as well on the weekly timeframe.
- Lower highs since September 2022.
- Trading above EMA100 which is working as support. The current sideways action is sort of a distribution phase... See the chart:
- Last month the DXY closed above EMA10 followed by a rejection this one, so trading back below this level.
- Bearish divergence with the RSI, since March 2015.
RSI lower highs:
DXY higher highs:
If the inverse relation to Crypto is true, this would match perfectly with the upcoming Bitcoin's bull market.
Namaste.
Dollarindex
USD JPY - FUNDAMENTAL ANALYSISBNP Paribas 2023-2024 Exchange Rate Forecasts
Capital Outflows will Undermine the Dollar
A starting point for the BNP market analysis is that it considers the dollar is notably overvalued in global markets, especially against the yen.
It adds; “The USD on a G10 trade-weighted index is trading almost 2 standard deviations (about 25%) rich relative to our estimates of its long-term fair value, as captured by the BNP Paribas FEER.”
The debate surrounds whether there will be a trigger for the overvaluation to be reversed.
BNP expects a significant shift in capital flows over the next few months which will have an important impact on currency rates.
According to the bank; “The normalization of global yields should continue to encourage repatriation by Eurozone and Japanese investors, who are overweight US assets.”
BNP also considers that unease over US equity valuations will encourage a flow of funds out of the US into the rest of the world
It adds; “Coupled with FX-hedge ratios at low levels, we see space for significant USD selling.
Overall, BNP places less emphasis on Federal Reserve rate cuts in forecasting that the dollar will lose ground.
Yen Can Secure Capital Inflows
BNP continues to expect a strong recovery for the yen.
Firstly, it expects that the Bank of Japan will tighten policy in July which will tend to strengthen the currency, especially given scope for a repatriation of funds by domestic institutions.
It also expects lower US yields will support the yen while the threat of intervention will tend to curb potential selling pressure on the currency.
The dollar to yen (USD/JPY) exchange rate is not forecast to hold above the 140.00 level.
EUR USD - FUNDAMENTAL ANALYSISBNP Paribas 2023-2024 Exchange Rate Forecasts
Capital Outflows will Undermine the Dollar
A starting point for the BNP market analysis is that it considers the dollar is notably overvalued in global markets, especially against the yen.
It adds; “The USD on a G10 trade-weighted index is trading almost 2 standard deviations (about 25%) rich relative to our estimates of its long-term fair value, as captured by the BNP Paribas FEER.”
The debate surrounds whether there will be a trigger for the overvaluation to be reversed.
BNP expects a significant shift in capital flows over the next few months which will have an important impact on currency rates.
According to the bank; “The normalization of global yields should continue to encourage repatriation by Eurozone and Japanese investors, who are overweight US assets.”
BNP also considers that unease over US equity valuations will encourage a flow of funds out of the US into the rest of the world
It adds; “Coupled with FX-hedge ratios at low levels, we see space for significant USD selling.
Overall, BNP places less emphasis on Federal Reserve rate cuts in forecasting that the dollar will lose ground.
Euro Can Secure Capital Inflows
The bank maintains a broadly constructive stance towards the Euro.
It expects that the ECB rate hikes and quantitative tightening will encourage foreign inflows and domestic repatriation.
Although BNP expects that energy prices will strengthen, it does not expect a return to 2021 levels.
Overall, the bank expects gradual EUR/USD gains over the medium term.
USD/JPY - Incredible Moves to close out the weekOANDA:USDJPY
Thursday we saw a nice oscillator Matrix set-up to the down side.
Then on Friday, the market makers decided to go for recent highs with 2 scalp entries.
Incredible oscillator triggers kept us on the right side of the action....
Enjoy the rest of your weekend...
Dollar Index (DXY): Local Bullish Reversal 💵
If feels like the correctional movement is coming on Dollar Index:
after a strong bearish impulse, the market started to consolidate on 1H.
The price formed a horizontal trading range.
Its neckline was broken to the upside, indicating the local strength of the buyers.
I will expect a pullback to 102.65
❤️Please, support my work with like, thank you!❤️
Dollar’s Dedollarisation is working “smoothly”. 12/May/23.The Ying and Yang = everything “up” will be “down” eventually. Many economists said no any country could “replace” US’s bonds BUT chart pattern/ cycle = the law of universe told us different “scripts/ stories “..And US is trying hard to “write/ amend “ his own “script”...
Post-Interest Rates... 🏁--> Momentum Push? USD Interest rates helped to pull EURUSD back for better prices. Euro interest rates was the catalyst for a +1% increase in the EURUSD currency pair. The WeekIy candle can push a bit more to end off the week. We usually have a bunch of liquid just past extreme highs and that is what I am explaining on the chart. This is a price action concept. took buys at the beginning of the move and took my humble 14 pips.
Anticipating a continuation of price to the upside with consumer sentiment tomorrow. It is expected to improve over the prior data point two weeks ago for the USD. Given the massive buy volume it is difficult for me to visualize that the current daily candle will not attempt at lease so some of push towards the next daily level 1.098 Daily Resistance Level.
DXY: Aiming at a new Low. Long term bearish trend intact.DXY is having the strongest bearish 1D candle since the May 31st rejection at the top of the long term Channel Down. The 1D time frame is deep in red technicals (RSI = 36.647, MACD = 0.090, ADX = 40.756) but the fact that the price crossed under the 1D MA50 gain, calls for more selling.
Based on the previous bearish leg, we aim at a medium term correction of -4.85%, thus our target is structured TP = 99.700. Long term target is at a -6.66% (TP = 97.770) but only after a rebound, but until then our strategy will be updated with a new idea.
Prior idea:
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Buyers are we Stretching the Luck? 🫢- Weekly Candle is Bullish and has pushed past the previous week's high creating a nice breakout of 77 pips
- The 3 Daily candles this week have been Bullish
- The Previous Daily candle increased by 70 pips in total ( 31 Pip Body and 40 Pips top wick )
- The previous daily candle's top wick was larger than the body of the candle itself.
- The 4hr timeframe has closed two large engulfing bear candles in the time since Interest rates
- The Market has punished late buyers with Interest rates data ( I called this out check previous post)
- The market has seen a change of character and this has known to be a frequent occurrence with interest rate releases.
- I don't think a randomness bias is associated with this Short Idea after we have seen 3 Bullish daily candles in a row ( The evidence above )
- The Market is Beast and representation of the psychology of all of it's participants. Follow your understanding of the price behavior and execute with only good Risk/Reward Ideas.
DXY, H4 | Reversal off pullback resistanceWe're seeing price approach a major resistance level at 12858 which is an overlap resistance + 23.6% Fibonacci retracement and a 38.2% Fibonacci retracement. It'a also nice to see a descending resistance line and a bearish ichimoku cloud contribute to the bearish momentum of the setup.
A reversal from here could see prices drop towards the 12804 level.
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DXY Weekly OutlookWeekly Timeframe
- DXY tapped the Weekly Fair Value Gap & 0.5 Level of the whole move.
- As Per 37 Year Seasonality chart, DXY will go to tap May Highs & Weekly Liquidity Upside.
Daily Timeframe :
- On Daily time frame withing the Weekly FVG, we get a Daily Orderblock.
- This orderblock is acting as a support and price is giving a good reaction from the orderblock.
- So far Price stays above this order block, expecting the price to move towards 104.699 - 105.883 Levels.
12 HR Timeframe
This chart is from the perspective of Pattern & Elliot Wave Count.
- On 12 HR it's forming Wave 4 Bull flag with ABC subwaves.
- Breakout from this bull flag will confirm that the price is heading for the extended 5th Wave.