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Will ongoing risk-on theme keep dampening the US dollar further?Macro theme: - On Tue, PBoC surprised investors with a new set of support measures that positively impact risky assets. This unexpected move has injected a fresh wave of optimism into the markets. -In contrast, the latest data from the US revealed a surprising decline in consumer confidence, which fell to 98.7 this month from a revised 105.6 in Aug. This marked the most significant drop since Aug 2021, sparking concerns about the health of the US economy. - As a result, market expectations for another 0.5% rate cut by the Fed at its Nov meeting have increased significantly. According to CME Group's FedWatch Tool, the probability of such a move jumped to 60.7% from 53% just a day earlier. This shift towards a more dovish monetary policy stance has further weakened the US dollar as investors become more risk-tolerant. Technical theme: - On the 4-hour chart, DXY broke its support area of 100.55-100.60 and confirmed its downward movement. The price is trading below both EMAs by a fair distance, and there is a risk of a potential mean reversion if it tests a strong psychological level, such as 100.00, ahead. - If DXY extends its decline, it may retest and find psychological support around 100.00, confluence with its descending channel's lower bound.  - Meanwhile, DXY may recover to fill its gap and retest the broken area around 100.55-100.60 before resuming its downward movement. Analysis by: Dat Tong, Senior Financial Markets Strategist at Exness
TVC:DXYShort
by DatTong
2
U.S. Dollar Index is near to fall. Soon..The US Dollar Index (DXY), which measures the value of the US Dollar (USD) against basket of other six major currencies, extends its losses for the 5th consecutive week in a row, hovering below 102 points during the U.S. regular hours on Monday, August 19. Over the past week, Gold spot (XAUUSD) has topped $2500 per ounce psychological high also, minting new all the history peak, while Forex Eur/Usd (EURUSD) pair just has flashed a positive 2024 YTD return, jumping above 1.10 psychological degree. The US Dollar continues to weaken following dovish comments from Federal Reserve (Fed) officials, which have increased a new portion of expectations for an interest rate cut by the central bank in September. Furthermore, last week’s US economic data revealed that both the Producer Price Index (PPI) and Consumer Price Index (CPI) suggest that inflation is easing. Federal Reserve Bank of San Francisco President Mary Daly stressed on Sunday that the US central bank should adopt a gradual approach to lowering borrowing costs, according to the Financial Times. Daly countered economists' concerns that the US economy is facing a sharp slowdown that would warrant rapid interest rate cuts. Additionally, Federal Reserve Bank of Chicago President Austan Goolsbee cautioned that central bank officials should be careful not to maintain a restrictive policy longer than necessary. Although it's uncertain whether the Fed will cut interest rates next month, failing to do so could negatively impact the labor market, according to CNBC. Additionally, the decline in the US yields contributes to downward pressure for the Greenback. 2-year and 10-year yields on US Treasury bonds stand at 4.05% and 3.85%, respectively, at the time of writing. This week, all eyes will be on Federal Reserve Chair Jerome Powell's upcoming speech. In a bottom line, the major technical graph for the US Dollar Index (DXY) indicates on possible huge decline for the next upcoming 12 to 18 months. The secondary RSI(14) graph indicates also, the bearish sentiment prevails.
TVC:DXY
by Pandorra
Dollar Index 4hr analysisContinuing our scenario analysis and forecast on the weekly and daily timeframes, here are the reasons for which we believe that at the moment the most likely scenario to play out is scenario 1 (dollar strength), from now on or soon: 1. the flat most likely to play out in the daily is a regular flat (dark blue) because the flat inside it (light blue) is the one that looks most proper, or "ideal", as it has a perfect correction inside it to mark the b wave (marked by a circle, both on the chart and on the macd). 2. the contracting flat that you can see in part 2 of our daily analysis, is a terrible looking correction because even it it were a contracting flat, still the b wave inside it should be the most corrective piece, and it isn't. 3. there is growing divergence on the way down in this last move down on the 4hr, which indicates a potential turn. Please follow us if you feel that our analysis or setups can be of help! Thank you for viewing.
TVC:DXYLong
by TradingClear
Which scenario now for DXY ? (weekly timeframe) - part 2This is the second scenario that could still play out on the dollar index. If you've seen part 1 of this analysis, you will know that I have mentioned the fact that a solid direction has not yet been taken nor been confirmed. In this second scenario, opposite to scenario 1, the dollar will continue to be weak, therefore it will continue it's road to the downside. weakness. Technically speaking, if this is the scenario that will play out, then the flat in the middle (marked by the yellow lines) is a contracting flat. We like this scenario less, and we think this is the least likely scenario, because inside the alleged (contracting) flat, the b wave is the one which is the least corrective, which doesn't really "work" for a b wave. At the moment, we cannot entirely rule out this scenario, however, because we are in fact moving under (maybe consolidating under) what would be the trend line if that really is a contracting flat. However, considering we are "getting tired" of going lower (pls see 4hr timeframe analysis), considering we the likelyhood of scenario number 1 and considering we are at a low price, we will start looking for buys on the dollar (so sells on eurusd for instance).
TVC:DXYLong
by TradingClear
Which scenario now for DXY ? (weekly timeframe) - educationalWhich scenario is going to unfold, at this point, on the dollar index on the weekly and daily timeframes? That is the question everyone's asking. There are two scenarios still possible, because the direction has not been either taken not confirmed as yet. This is scenario 1: we will now go for a reversal of the dollar (dollar strength) to complete a regular flat, before resuming the downside. Is this the most likely scenario? At the moment it seems it is, because on the daily timeframe you can see that the movement that occurred between December 23 and April 24 has the biggest correction inside, which would make said movement the B wave of the internal flat (marked in light blue). At this point, we are therefore starting to look for buy opportunities on the dollar index, so sell setups on eurusd for instance.
TVC:DXYLong
by TradingClear
Inter-market analysis I'll conduct an inter-market analysis focusing on the relationships between various financial instruments over different time frames. 1. Short-term view (Image 2 - approximately 1 month): - Gold (yellow line) has been the best performer, showing a steady uptrend and currently up 5.07%. - The U.S. Dollar Index (green line) has been relatively stable, with a slight decline of 0.06%. - SPX (red line) has shown some volatility but is up 1.18%. - Bitcoin (blue line) and WTI oil (white line) have been more volatile, with Bitcoin currently down 2.57% and WTI down 4.94%. 2. Medium-term view (Image 1 - approximately 3 months): - Gold continues to be the top performer, up 13.69%. - The U.S. Dollar Index has weakened, down 4.91%. - SPX has recovered and is now up 4.25%. - Bitcoin has shown significant volatility but has recovered to a 1.91% gain. - WTI oil has had a strong recovery, now up 10.56%. 3. Long-term view (Image 3 - approximately 9 months): - Gold has been the most consistent performer, up 28.21%. - Bitcoin shows the highest volatility, with dramatic swings, currently up 39.39%. - SPX has had a steady uptrend, now up 20.31%. - The U.S. Dollar Index has weakened over this period, down 1.56%. - WTI oil has recovered from earlier lows, now up 1.47%. Key observations: 1. Inverse relationship between Gold and the U.S. Dollar: As the dollar weakens, gold tends to strengthen, which is evident across all time frames. 2. Bitcoin's high volatility: While showing strong performance over the long term, Bitcoin experiences significant short-term fluctuations. 3. Steady performance of equities (SPX): Despite some short-term volatility, the stock market has shown resilience and growth over the medium and long term. 4. Oil price recovery: After a period of weakness, oil prices have shown a strong recovery in the medium term. 5. Safe-haven appeal of Gold: Gold's consistent performance across all time frames suggests its role as a safe-haven asset during periods of market uncertainty. This analysis suggests a market environment characterized by dollar weakness, strength in alternative assets like gold and Bitcoin, and resilience in equities. The recovery in oil prices could indicate improving global economic expectations. Investors appear to be balancing between risk assets (equities, Bitcoin) and safe-havens (gold), possibly hedging against inflation or economic uncertainty.
TVC:DXY
by Moshkelgosha
DXY Analysis: Wyckoff Accumulation Suggests Upside PotentialDXY Analysis: Wyckoff Accumulation Suggests Upside Potential The Dollar Index (DXY) recently bottomed following an extended period of consolidation, marking the end of a Wyckoff Accumulation pattern on the chart. This phase of accumulation indicates that the dollar has likely built enough momentum for a bullish move. In the near term, I expect DXY to rise toward 101.6, followed by further strength taking it to 105.55 by the end of the year. As the accumulation phase transitions into a markup phase, the dollar is set for a period of appreciation.
TVC:DXYLong
by Hexacapital
Dollar Index SellAs dollar index had expierenced waterfall during new on US session and it has stopped over its weekly support and is also forming a falling wedge pattern which is a Bearish Continuation pattern now and it has also completed ABCD waves and going to complete its last E wave if everything goes inline after E Waves it will break down its weekly to daily Support and will start falling again after a reset market sentiment is also indicating that DXY will continue falling also the confluence is price is trading in down trend on daily to H4 to H1 TF and bullish in weekly and monthly TF according to my anylisis DXY will keep falling till its weekly base acting as support on 98.00
TVC:DXYShort
by Wakeel_Saab
USD, DXY - RSI Divergence After Fresh Yearly LowThe Fed leaned dovish last week with the 50 bp cut, also highlighting their expectation for another 50 bps of cuts into the end of the year. Initially the announcement brought out USD bears as DXY pushed down for a fresh yearly low. But shortly after the currency began to pare back those losses and it finished in the green for the day last Wednesday. There was continued grind into the end of last week but notably, prior support structure had held after the false breakdown on Wednesday. At this point, there's now a case of RSI divergence on the daily chart with the indicator setting a higher-low after that lower-low in price. This is on the heels of the oversold reading via RSI on the weekly in late-August. The push point for this week is the Core PCE data set for release on Friday. And until we get to that, there will be multiple points of Fed-speak, such as we saw this morning with Austan Goolsbee. He sounded quite dovish and it wouldn't surprise me to hear more of the same. But the more interesting scenario here is if the USD continues to hold support even as the Fed speaks of more loosening. EUR/USD would be one of the more attractive major pairs for USD-strength while GBP/USD and perhaps even USD/JPY are more attractive for scenarios of USD-weakness continuation. - js
TVC:DXY
by FOREXcom
DXY (Dollar) Sells from 101.700For the DXY, my outlook is that the price will retrace back up to 101.700 before continuing its bearish trend with another drop. Since that point of interest (POI) is still far from the current price, I’ll be looking for a potential buy setup around the 100.800 area, which aligns with a 3-hour demand zone. If the price respects this zone, it could generate enough momentum for the pullback. We’re already seeing a strong reaction from the 9-hour demand zone I marked last week, supporting this scenario. A further decline in the dollar will serve as a confluence for bullish moves in my other pairs. Have a great trading week, everyone!
TVC:DXYShort
by Hassan_fx