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Let's look at the big picture! What's in store for the USD?Let's look at the big picture! What's in store for the dollar? Let's analyze the expectations for tomorrow's Non-Farm Payrolls and Unemployment Data. We'll start with economic reasons and market reactions. A strong downward trend in USD began at the start of last month. The primary driver was the much lower-than-expected non-farm payrolls data and the higher-than-expected unemployment data. During its last meeting, the Fed paused rate cuts. This pause, coupled with the rising unemployment rate and declining payrolls data, sparked recession fears in the market. Last month, non-farm payrolls came in at 114k, below the 176k expectation, though the 2024 average is 202k. This is comparable to pre-pandemic levels. The real issue is the 4.3% unemployment rate. Since dropping below 4% in 2022, unemployment stayed below that level until May 2024. May saw a 4% rate, June 4.1%, and July 4.3%. This steady increase after two years of being anchored below 4% raised concerns that the economy is cooling more than desired. However, the 2024 average is still below 4% at 3.96%. This panic has led the market to expect a 50 basis point rate cut at the Fed's September meeting. This is reflected most clearly in the U.S. swap market. The swap market (top right corner of the graph) expects the Fed to make three cuts by year-end, totaling 100 basis points. This suggests one of the cuts, particularly at the September meeting, will likely be a 50 basis point reduction. The key issue here isn't just that unemployment has risen above 4%. The concern is the steady upward trend over the past three reports. If tomorrow's unemployment data comes in above 4.3% and this upward trend continues, market panic could intensify, and the expectation of a 50 basis point cut in September could be further priced in. However, the Fed doesn't entirely agree with the market. Powell signaled at Jackson Hole that rate cuts would begin in September, but both his speech and subsequent Fed statements hinted that the September cut would be 25 basis points. At the end of last year, the market also ignored the Fed and priced in rate cuts too early, only to later align with the Fed. While we are seeing an upward trend in unemployment, the averages remain reasonable and, more importantly, close to pre-pandemic levels. Yes, it seems the time for cuts has come, but we don't expect 100 basis points by year-end as the market does. At best, the Fed may implement three 25 basis point cuts by year-end, and at worst, two cuts. Service PMI data remains above expectations, and real market participants are not as pessimistic as the swap markets. We've seen multiple times that the Fed doesn't take market expectations as a guide when making decisions. If tomorrow's unemployment data comes in at 4.3% and non-farm payrolls around 164k, we could see some initial volatility in the dollar, followed by a slight upward trend. In a positive scenario, if the data shows unemployment below 4.3%, the dollar could rally sharply. In a best-case scenario, if unemployment comes in at 4% or lower and non-farm payrolls around 200k or higher, we could see a significant rally. In a worst-case scenario, unemployment above 4.3% could deepen market panic and solidify expectations of a 50 basis point cut in September, leading to a sharp decline in the dollar. Technically, looking at the DXY, we see that we are at a significant support level in the bigger picture. This support has only been broken once since 2019, and even then, it didn't hold below this level for long. The downtrend that began at the end of June appears to have completed its 5th wave at this key support level. Now, it seems we're entering an ABC correction. The correction of the downtrend that began in June has reached the 23.6% Fibonacci level. In major trends, our expectation is for a correction to 23.6%, followed by a retracement in the trend direction and a move to the 38.2% primary correction level as it attracts more trend participants. Looking at the H4 chart, the short-term downtrend channel has been broken. After reaching the 23.6% primary correction level, the price has retraced to the 61.8% correction level and started finding support in these regions. Depending on tomorrow's data, we could see a retracement to the 78.6% or 0% level, forming a double bottom. If the data is supportive, we could witness a sharp rally towards the confluence of the main downtrend channel and the 38.2% level. In the event of negative data, based on the increase in unemployment, we could see a decline towards the July 2023 low of 99.60-99.80.
TVC:DXYLong
by TradeAndMeApp
1
DXY Levels to Watch Ahead of NFPLooking at the chart of the US Dollar Index (DXY), the world’s reserve currency remains in a well-defined downtrend despite last week’s bounce. The near-term reaction in the US dollar will likely follow the likelihood of a 25bps rate cut from the Fed (bullish) vs. 50bps rate cut (bearish) as outlined in the chart above, but ultimately, the dominant downtrend and potential for consistent interest rate reductions from the Federal Reserve in the coming year could keep the greenback under pressure as we move through the fall regardless. -MW
TVC:DXY
by FOREXcom
Why The Recent Gold Rally Could Be Jeopardised : USDX! It's Long Gold for the moment & I mentioned a break about 2500.21 would be the breakout point! I already see signs of the Gold rally losing steam. Well, let's call it a short term rally or a retracement rally of something greater. You see, since about midday Tuesday, so not even 48 hours ago, the USDX has been back-pedalling. I see it as a retrace to it's 38.2 Fib level and then the Gas could go onto the USDX because once something finishes it's Fib retracement it usually follows in its intended direction, the opposite direction to its retrace, the course and trajectory it was previously on, which for the USDX is upwards IMHO. This will bring 'Shorters' into Gold. So, in summary the USDX as seen on the 4HR chart has retraced to about 50% on the Fib scale, I will be watching closely to see if it moves down further to 38.2%, or even worse for Long gold punters, that it breaks upwards from 50%. We know from last Friday, the damage it caused when it broke 101.50. In trading, history tends to repeat. Gold & the USDX do not always follow their Inverse price relationship. But it happens about 80-90% of the time. Cheers Chris * Trading is risky. Please don't rely solely on my financial advice or trade setups. * Whilst I do my best to bring the most up to date Gold strategy, Gold trading moves very fast and so do it's variables. See chart.
EIGHTCAP:USDX
by Easy_Explosive_Trading
1
DXY: Bullish To Next SupplyPrice swept the key liquidity level at 100.600, also capturing the last minor structural liquidity through a manipulation move. Following this manipulation, the price began to rise with significant volume, leaving imbalances in its wake. We can anticipate a retest towards the equilibrium level, potentially sweeping the last minor low as indicated on the charts, before a strong bullish movement could propel the price towards the 102.500 level.
TVC:DXYLong
by Sphinx_Trading
Daily Technical Analysis of Gold,Currencies,and Indices 5/9/2024Daily Technical Analysis for Gold, Currencies, and Indices - September 5, 2024 Introduction: Hello, this is Mohammed Qais Abdulghani, a financial markets expert, with your daily technical analysis for the major currency pairs, commodities, and indices for Thursday, September 5, 2024. Before we begin our technical and economic analysis, let’s highlight the key economic data that will be released today and could impact price movements: • 3:30 PM Mecca Time: Unemployment Claims Report. • 4:45 PM: Services Purchasing Managers’ Index (PMI). • 5:00 PM: Non-Manufacturing PMI from the Institute for Supply Management (ISM). • 6:00 PM: U.S. Crude Oil Inventories Report. U.S. Dollar Index (DXY) Analysis: We observe that the U.S. Dollar Index continues to trade under pressure and below the 50-day moving average on the daily frame. It is also trading below the main downward trend line and the secondary downward trend line. As long as prices remain below the 102 level, the bearish bias is favored, potentially targeting the 100.300 and 99 levels. The recent data showed significant negativity, which may prompt the Federal Reserve to abandon its monetary tightening policy, possibly leading to a further decline in the U.S. dollar. EUR/USD Pair Analysis: The EUR/USD pair continues to trade within a positive scenario, with prices holding above the 1.1000 level, supporting the bullish outlook targeting 1.1210 and 1.1315 in the medium term. This positive scenario would be invalidated only by a break below the 1.1000 level. GBP/USD Pair Analysis: The GBP/USD pair maintains its positive stance with prices staying above the 1.3100 level, potentially driving gains toward 1.3250 and 1.3360. This upward scenario would be invalidated by a break below the 1.3100 level. USD/JPY Pair Analysis: The USD/JPY pair is attempting to return to its downward trend. Continuing prices below the 145 yen level could return the pair to a bearish path targeting 140 yen and also 134 yen. USD/CHF Pair Analysis: The USD/CHF pair continues to trade under pressure, with prices staying below the 0.8510 level, favoring a bearish bias targeting 0.8370 and 0.8240. AUD/USD Pair Analysis: The AUD/USD pair remains in a positive scenario, with prices holding above the 0.6670 level, which may push the pair to achieve gains towards 0.6900 in the short term and 0.7100 in the medium term. This positive scenario would be invalidated by a break below the 0.6670 level. NZD/USD Pair Analysis: The NZD/USD pair is looking to end its corrections and resume its upward trend, which will only be confirmed by breaking the 55-day moving average and surpassing the 0.6225 level. This could drive the prices upwards towards 0.6450 and 0.6550 in the medium term. USD/CAD Pair Analysis: The USD/CAD pair continues to trade under pressure, with prices remaining below the 1.3600 level, which could lead to further declines towards 1.3550. If this level is broken, losses could extend to 1.3300. GBP/JPY Pair Analysis: The GBP/JPY pair is trading under pressure, with prices staying below the 196 yen level, favoring a bearish bias that could push the pair to drop to 184 yen. EUR/JPY Pair Analysis: The EUR/JPY pair is trading under pressure, with prices remaining below the 164 yen level, potentially leading to a continuation of the downward trend towards 158 yen. EUR/GBP Pair Analysis: The EUR/GBP pair is trading under pressure, with prices remaining below the 0.8450 level, which could push the pair to decline to the 0.8375 and 0.8300 levels. This bearish scenario would be invalidated by a return to buying positions above the 0.8450 level. USD/TRY Pair Analysis: The USD/TRY pair is attempting to rise, and if it succeeds in surpassing the 34 lira level, it could drive prices upwards towards 34.50 and 35 lira. This scenario would be invalidated by a return of prices below the 34 lira level. BTC/USD Analysis: Bitcoin is trying to shake off the selling pressure. If prices successfully surpass the psychological barrier of 60,000 dollars, we could see a bullish wave targeting 66,000 dollars and 72,000 dollars. This optimistic scenario would be invalidated by a decline below the 60,000-dollar level. ETH/USD Analysis: Ethereum is attempting to reduce losses. If prices manage to break above the 2,550-dollar level, this could drive the price to retest 2,800 dollars. XRP/USD Analysis: Ripple is attempting to hold above the 0.55-dollar level, which could reduce previous losses and drive a rise towards 0.60 and 0.65 dollars. Gold (XAU/USD) Analysis: Gold continues to trade positively as long as it remains above the 2,460-dollar level. A break above the 2,520-dollar level on the 4-hour frame could lead to new record highs, targeting 2,600 dollars and 2,700 dollars. This bullish scenario would be invalidated by a break below the 2,460-dollar level. Crude Oil (WTI) Analysis: Crude oil continues to trade under pressure, approaching a crucial level at 70 dollars per barrel. The bearish scenario would be invalidated by a return of prices above the 73-dollar level. Silver (XAG/USD) Analysis: Silver is attempting to reduce losses. Holding above the 27.50-dollar level could drive prices to rise to 29 dollars, and surpassing this level could achieve gains targeting 30.50 dollars. Natural Gas (NG) Analysis: Natural gas continues to trade below the psychological barrier at 2.20 dollars, which could drive prices to close the price gap and target 1.80 dollars. Dow Jones Industrial Average (DJI) Analysis: The Dow Jones Industrial Average is attempting to hold above the 41,000-point level, and surpassing the 55-day moving average could indicate a strong rise targeting 42,500 points. This positive scenario would be invalidated by a break below the 40,000-point level. S&P 500 (SPX) Analysis: The index remains stable above the 5,500-point level, which could drive prices upwards towards 5,700 and 5,900 points. This positive scenario would be invalidated by a break below the 5,500-point level. NASDAQ Analysis: The NASDAQ index continues to trade under pressure, but surpassing the 19,250-point level could push prices upwards towards 20,400 points. Russell 2000 (RUSSELL 2000) Analysis: The index could see an upward movement towards 2,225 points if it succeeds in surpassing the 2,150-point level, with gains potentially extending to 2,320 points. This positive scenario would be invalidated by prices remaining below 2,150 points. FTSE 100 (FTSE 100) Analysis: The index maintains its positivity above the 8,200-point level, which could drive prices upwards towards 8,400 and 8,600 points. This positive scenario would be invalidated by a break below the 8,200-point level. DAX (DAX) Analysis: The index could see a freefall towards 18,000 points if it remains below the 18,750-point level. This bearish scenario would be invalidated by a return to buying positions above 18,750 points. CAC 40 (CAC 40) Analysis: The index is trading under pressure, with prices remaining below the 7,600-point level, potentially driving the index down towards 7,200 points. Nikkei 225 (NIKKEI 225) Analysis: The index could experience a freefall towards 35,000 points if it succeeds in breaking the 37,000-point level. Conclusion: We have reached the end of today’s daily technical analysis. Thank you for following along, and we wish you a successful trading day. Best regards, and stay safe.
TVC:DXY
by MohammedQais
DXY / US DOLLAR INDEX🔍 DXY (U.S. Dollar Index) Analysis: 4-Hour Timeframe 📉 The DXY chart on a 4-hour timeframe highlights significant upcoming times where price movements may present trading opportunities. It’s essential to analyze these signals in conjunction with higher timeframes for a comprehensive market view. • BUY DATE - September 12, 2024, 04:00 - Green Line: This time indicates a potential local low, offering favorable conditions for accumulating DXY or entering long positions. • BUY DATE - September 19, 2024, 00:00 - Green Line: Another potential local low, suggesting favorable conditions for buying. • BUY DATE - October 7, 2024, 06:00 - Green Line: This time marks another potential local low, indicating favorable conditions to enter long positions. When working with this 4-hour timeframe, remember to evaluate these movements within the context of the broader market trend, considering higher timeframes for a more global perspective. Note: The exact timing of these phases can vary by +/- a few hours. All times are based on UTC-7 (Los Angeles).
TVC:DXYShort
by trushkovskiy