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Milkshake

US CPI week for the DXY It has been a topsy turvy week for the dollar after the week opened with news of 25% tariffs on Mexico and Canada from the US as well as a 10% import duty on Chinese goods. The DXY spiked to a high of 109.9 before closing the week marginally lower at 108.1. The weaker than expected US NFP print however and surprisingly provided support for the DXY. This week’s price action is indicative that the ABC corrective wave has run its course and that another leg higher towards 112 is on the cards for the DXY. The critical support range is the blue range between 107.2 and 107.5. As long as the DXY remains above this range and maintain levels above the 50-day MA at 107.8 there is nothing stopping the DXY from moving higher as the dollar milkshake theory continues to suck the DXY higher. A break below 107.2 will however invalidate the idea and allow the DXY to drop onto the 200-day MA level of 104.8. It is CPI week for the DXY and a stronger than expected CPI print will allow the DXY to regain its momentum and commence the start of another leg higher for the index. The US CPI print for January, which is expected to remain unchanged at 2.9%, just like it did back for the December print. Inflation has been ticking higher since October last year, almost right after the Fed started their cutting cycle and anything other than an inline or lower than expected CPI print will have the DXY packing and making its way to 110 and 112 thereafter since it will indicate that the Fed will stay higher for longer.
TVC:DXYLong
by Goose96
3
Euro's probable fall to parityThe greenback looks set to add to its gains against the euro after yesterday’s sticky US CPI print. Positive employment data from the euro zone and in line with expectations Q4 GDP prints yesterday also did little to spark confidence in the euro. The euro managed to push the pair above the 61.8% Fibo retracement level, 1.096, from the downward wave following the start of the Fed’s hiking cycle. The dollar has since managed to find its footing which has seen the pair fall back onto this critical level. This rate at 1.096 also coincides satisfyingly with the 50-day MA rate currently at 1.0719. I expect this support level to give way which will allow the dollar to pull the pair onto the zone between the blue 38.2% Fibo retracement rate of 1.044 and the green 50% Fibo retracement rate of 1.046. A break below this level will see the dollar test the pair’s 200-day MA rate currently at 1.032 and deeper into the zone between the green 38.2% Fibo at 1.023 and the blue 50% Fibo at 1.021. I honestly won’t rule out a move back to parity around the end of 1Q2023 and start of 2Q2023 as it coincides with the blue 61.8% Fibo rate and the green 23.6% Fibo. Fundamentally I don’t see much support for the euro unless there is a concrete “Fed pivot”, which is looking unlikely. As the recessionary realities hit the global economy investors will run back to the dollar and higher yielding US bonds which will be dollar positive. Technical indicators: The sell signal on the daily MACD indicator is losing momentum which could allow for a pullback towards 1.080 and 1.090. (This is where my sell limit orders will sit). The daily RSI however still has room to move lower. It’s the weekly indicators which are making me a greenback enthusiast (I’ll leave the weekly chart in the comments). The weekly MACD buy signal is rolling over and looks set to cross to a sell signal and the weekly RSI has already started rolling over from its high of 68.70. The weekly RSI has not been this high since January 2021. The dollar’s deprecation in 4Q2022 was clearly a melt up in investor risk-on sentiment which rode on the back of the supposed “Fed pivot”. The dollar milkshake is very much in play for 2023.
Short
by Goose96
1
Dollar sweeps the floor with the world. 🧹🌎The DXY is cooling off but is the run over? Unlikely in my opinion but I am by no means an absolute master. So take the following with a grain of salt. Ive noticed people on Twitter have stopped calling for the Dollar top to be in. Including myself when I thought the Double top would lead to a pull back. Little did I know what was actually going on. Each local top the Dollar has put in, the correction held support right at the top of the Blue Zone on the FIBZIA (.764) Worth noting that it corrected below all previous local tops but printed HL's the entire way. I dont think this time will be different. I also do not think the FED will choose to prolong the inflation war and pain to cater to the U.N. who is pleading for a pivot. High rates are making it hard for smaller countries and economies pegged to the dollar to service their debt and the USD will continue to destroy them while sucking up the liquidity. If the FED pivots early it hurts America and at the end of the day I think the US will want to retain its status as the top dog no matter what happens to other countries. Cue the #milkshaketheory If you have never heard of this term or theory its def worth the 5 minute search.
TVC:DXYLong
by jlouvierobv
2
There will be BloodListening to Jerome Powell speech this morning reminded me of the "I drink your milkshake scene" in There will be Blood. For anyone that has not seen the movie or read the book I suggest doing so. You won’t be disappointed. To summarize, the main antagonist Plainview (Jerome Powell) gives Eli (Global Liquidity) false hope before pulling the Rug. Here is Jerome Powells speech this morning translated to the movie. Here, if you have a milkshake, and I have a milkshake, and I have a straw. There it is, that's a straw, you see? Watch it. Now, my straw reaches across the room and starts to drink your milkshake. So there it is. Inflation is here to stay. Rates will remain High. Jerome will Drink your Milkshake.
SP:SPXShort
by SPYvsGME
16
Why is inflation reflecting into a strong dollar?You may have often seen us mention the U.S. Dollar Currency Index (DXY), as it has significant negative correlation to Bitcoin (BTC). Meaning typically when DXY is up, BTC is down, and vice versa. Over the past month, the DXY has broken out from its resistance and made highs not seen in twenty years. The DXY is a measure of US Dollar strength against a basket of its foreign peers. Euro (EUR), 57.6% weight Japanese yen (JPY) 13.6% weight Pound sterling (GBP), 11.9% weight Canadian dollar (CAD), 9.1% weight Swedish krona (SEK), 4.2% weight Swiss franc (CHF) 3.6% weight (Note that other world currencies like the ‘Chinese Yuan’ and ‘Brazilian Real’ are not included in the DXY) The DXY strength Let’s begin to examine why the US Dollar (USD) has seen significant strength since 2021. First, the US Federal Reserve was not the only Central Bank in the world that increased money supplies in an attempt to ease economic uncertainties of the COVID pandemic. The European Central Bank, Bank of Japan, Bank of England, and many other central banks around the world followed similar monetary policies, commonly referred to as Quantitative Easing. Notice these same banks (ECB, BoJ, and BoE) are in charge of monetary policy for the largest weighted currencies in the DXY. Your layman might ask: “Why is the dollar so strong, if inflation is so high? Shouldn’t I not want to be holding fiat in times like these?” And the answer was yes — when the Federal Reserve began printing COVID stimulus cash in 2020. But as global markets soften, the safe heaven has always been to flee to cash. The USD as a reserve currency This is because the USD has been the world reserve currency since Post World War II agreements and the establishment of the ‘Brentton Woods System’. As the world began to rebuild post war, as trade and commerce returned — the US dollar’s strength as the world reserve currency was hardened. Even as the US broke terms of the Brentton Woods System, when Richard Nixon took the US off the ‘gold standard’ (a standard that meant that USD was convertible to gold bullion), the Dollar had already cemented itself as the means in which debts would be issued and commodities would be traded in, around the world. Which leads us back to ECB, BoJ, and BoE. If the Fed is printing dollars, and the largest central banks are doing the same, that negates the negative effects on the increased USD supply compared to its peers. In fact it increases USD demand. If debts around the world are most commonly issued in USD, these same central banks need to continue to print their currency to keep up with the demand to convert to USD and pay these debts, creating a vicious cycle that exacerbates effects further. Once the world economies are through the hangover of stimulus injection, the United States is expected to bounce back the soonest. When it does, investment will return and rush to growth sectors. And again, putting further strain on dollar demand. This is significantly dangerous to all sovereign debt, as the USD rapidly appreciates within the next few years, and its peers experience massive devaluation. Described like a straw sucking a milkshake, all of this pressure is expected to pull liquidity into the United States creating an unsustainable vortex. ‘The Dollar Milkshake’ theory This is the foundation of the ‘Dollar Milkshake Theory’ popularised by Brent Johnson of Santiago Capital, and it is exactly why you need to be very cautious of the Dollar Index as it breaks out from resistance. This theory really makes you rethink the Dollars strength as the world reserve currency. Suddenly, DXY trading at $120 doesn’t sound so far-fetched. I implore you to read more on the ‘Dollar Milkshake Theory’. I find it the most fascinating theory in finance currently, and it summarises the Dollar Index strength we have seen so perfectly. Take a visit to the team at Real Vision Finance, who exceptionally explain this theory better than I can. While watching it, keep in mind this was published in September of 2021, when the DXY was trading at $92 and just starting the breakout from its ‘double bottom’. Then make sure to follow the Milkshake Man himself, Brent Johnson’s Twitter @SantiagoAuFund. Brent mostly follows traditional markets, but you will see him from time to time mingle with the Crypto Twitter crowd. Drink up and don’t forget to read the rest of the Fundamental Fridays articles!
TVC:DXY
by config_json
2
LINKUSDT Scenario CastingMy Scenario Casting for Chainlink. IMO there's a great possibility for a major bear coming for LINK and we could possibly see it going back to $4. This would need to coincide with the dollar strength and weakness of bitcoin. I have shared some charts predicting a strong dollar in the upcoming weeks, dollar strength is bad for crypto against fiat in general. Things change very quickly in the crypto market, always size your positions so you dont get burnt too much if your analysis is wrong Share your thoughts in the comment below Like and follow for more content Good Luck!!!! Inverse chart
Short
by TradingWithTheTrend
5
XAUXAG ratio to go to 20, could possibly go lowerXAUXAG ratio to go to 20, could possibly go lower, that's a strong case for silver. Not betting so much on the pullback, but the dollar strength could initially mean a dip in both Gold and Silver, but when the bounce back silver will gain at a much faster rate than gold. Not a bad idea to jump in now if you are not using leverage. What do you think? Drop a comment below and share your own charts. Comment, LIKE and Follow
OANDA:XAUXAGShort
by TradingWithTheTrend
5
Update on DXYI initially had a target of 93.15 for the dollar index. The target has been reached and the price broke the level and the next estimate is 92.66. There is also a possibility of over performance to the 91 level. EURUSD is currently in a very significant level and if the level repels the price (which it will most likely do) it probably will be followed back by a pull back in silver and gold as well as crypto, however at the moment DXY is not showing signs of recovery
TVC:DXY
by TradingWithTheTrend
Long term Bitcoin AnalysisBitcoin has been bullish in the past week, and the price is showing rejection in the weekly long term trend. The rejection will only be confirmed on Sunday. My prediction is that BTC has hit a resistance level at 11,500 and will rest and sell off to between 9000-6000 and form a third relative low and then we will enter a bull market again. This may take time, make sure you are liquid enough for when its time to moon Would love to see your comments on this one. This is a bold call
BITSTAMP:BTCUSDLong
by TradingWithTheTrend