Demand in DXY?!? - LTFlooks like DXY may have found some low time frame support. LTFs have made a series of higher highs and higher lows with multiple areas of demand that could act as even more support for this market
USDX trade ideas
DXY Local Rebound Ahead! Buy!
Hello,Traders!
DXY was falling sharply
And was locally oversold
So now that it is already
Making a bullish rebound
From the horizontal support
Of 100.520 a further
Bullish correction is
To be expected
Buy!
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USD Oversold Weekly for First Time Since 2018It's been a painful first two months of Q3 for the US Dollar. Bears started the push shortly after the July open, and with USD/JPY carry unwind starting shortly after, there's been a constant and near-continuous push from sellers.
At this point, the USD finished last week with RSI in oversold territory for the first time since January of 2018. That episode marked a significant low but notice that the reversal didn't happen quickly then, as RSI is not great as a timing indicator. It can be helpful for context, however, highlighting a one-sided market and this is something that could be of interest in the not-too-distant future, especially for those looking at bearish themes in EUR/USD at some point.
For now, carry unwind remains an issue and with Powell's proclamation of a pivot at Jackson Hole on Friday, holding long carry in USD/JPY hasn't been this unattractive since before the Fed started hiking rates in March of 2022.
For this week, the item of interest is possible capitulation in EUR/USD, which could show with an extended upper wick after a failed run at fresh highs. For levels - the 1.1275 Fibonacci level in EUR/USD remains of interest as this helped to hold the highs last year.
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Market News Report - 25 August 2024While the yen was a bit stronger this week, the US dollar was the biggest loser, as it has done for several months this year.
While other currencies piggybacked off dollar weakness, the future is never guaranteed in the forex world.
Let's see what to expect from the major currency markets fundamentally and technically.
Market Overview
Below is a brief technical and fundamental analysis breakdown for all major currencies.
US dollar (USD)
Short-term outlook: bearish.
The latest Fed meeting was overall dovish, with Powell indicating a rate cut was on the table next month. STIR (short-term interest rate) markets have suggested a 73% probability of this happening (up from 53% the previous week).
There is some cooling in the labour market. Unemployment recently rose from 4.1% to 4.3%, and revisions data from the Bureau of Labour Statistics have shown a gap of 818K jobs missing.
Watch out for the upcoming initial jobless claims this week. These are often a precursor to the new unemployment rate released at the start of the month.
The DXY chart aligns perfectly with the fundamentals, testing a major support area (100.617) on the daily chart. Meanwhile, the key resistance is far away at 107.348 and will likely remain untouched for some time.
Long-term outlook: bearish.
Markets anticipate at least two rate cuts before the year ends. Weakened jobs data is another bearish driver for the dollar.
Only geopolitical risks, bond market selling, and interest rate differentials can affect this sentiment.
Euro (EUR)
Short-term outlook: weak bearish.
The latest EU retail sales indicate that the consumer is taking some time to recover from the inflation shock.
The European Central Bank (ECB) has stressed that it is data-dependent. For fundamental analysts, this means that certain economic data, like employment data, may boost the euro.
While also indicating that their interest rate meeting is 'wide open,' markets see a 95% chance of a cut next month (up from 87% last week).
Interestingly, the chart tells a different story. After breaking the last major resistance, the next target is 1.12757. Meanwhile, the key support area lies far below at 1.06494.
Long-term outlook: weak bearish.
The ECB hasn't committed to a specific future path with the interest rate. They are data-dependent, meaning data around inflation, growth, and wage improvement can lift the euro.
British pound (GBP)
Short-term outlook: bearish.
The Bank of England (BoE) cut the interest rate by 25 basis points at the start of this month. However, they remain data-dependent and have no set future path. STIR markets are currently pricing in an additional two cuts for the remainder of 2024.
The central bank's current key theme is fighting persistent inflation in the United Kingdom. Any future failures here would likely weaken the GBP.
As with the euro, the British pound has been saved by dollar weakness on the charts. Just as we thought the major resistance (1.31424) was too far, it has surpassed this level. However, considering its significance, we should only know how convincing the break is during the week.
On the other hand, the nearest key support is far away at 1.26156.
Long-term outlook: weak bearish.
The interest rate is the chief bearish driver for the pound. However, STIR markets predict a rate hold next month. Furthermore, two-way risks remain based on upcoming economic data (e.g., inflation, labour, economic growth).
Japanese yen (JPY)
Short-term outlook: weak bullish.
The Bank of Japan’s (BoJ) recent decision to hike the interest rate is bullish for the yen. However, STIR markets expect a hold (100% probability, from 95% last week) at the next meeting but a hike at the start of next year.
After cooling down last week, USD/JPY looks to have resumed its downtrend, confirming the poor dollar.
The major support level to watch is 140.252. Meanwhile, the major resistance (at 161.950) is too far for traders to worry about.
Long-term outlook: weak bullish.
In addition to the recent rate hike, other bullish catalysts for the yen include lower US Treasury yields.
The Bank of Japan is actively intervening in the forex markets, contributing to the JPY's upside last month. However, having moved quite a distance, a further retracement is imminent.
Australian dollar (AUD)
Short-term outlook: weak bullish.
The Reserve Bank of Australia (RBA) unsurprisingly kept the interest rate unchanged not long ago to keep the fight against persistent inflation rate. Based on their language, a hike isn't out of the question this year.
Like many currencies, the Aussie remains data-sensitive, whether we look at economic growth, labour, or inflation going forward. The recent rise in China's share prices, which correlates with the Aussie, has been positive for the currency. Still, there is doubt over the longevity of this run.
Diarise Wednesday's upcoming CPI (Consumer Price Index) reading for the Aussie.
As further proof of the short-term outlook, the Aussie market has risen noticeably. In our last report, it was only 130 pips away from the nearest major resistance at 0.67986. It is now right onto this level. So, it will be interesting to see how it reacts this week.
Meanwhile, the major support level is down at 0.63484.
Long-term outlook: weak bullish.
The RBA remains hawkish as per last week's meeting, focusing on core inflation. Overall, it's crucial to be data-dependent with the Aussie, with recent labour data keeping the bullish script alive.
However, the Australian dollar is pro-cyclical, so it is exposed to slow economic growth in other countries.
New Zealand dollar (NZD)
Short-term outlook: bearish.
The New Zealand dollar is the only currency we have recently updated the short-term outlook (from neutral to bearish). This is mainly due to the central bank dropping the Kiwi's interest rate from 5.50% to 5.25% two weeks ago.
Lower-revised cash rate projections also hint at the potential for further cuts in the near future.
Similar to its closest relative, AUD, the Kiwi is near the major resistance at 0.62220. Only time will tell if it can break or pull back in the coming days. So, this remains the focal point, while the major support is at 0.58498, an area which it is unlikely to test soon.
Long-term outlook: weak bearish.
In its latest meeting, the central bank's dovish stance (where it cut the interest rate) puts the Kiwi in a 'bearish bracket.'
However, as a risk-sensitive currency like the Aussie, any growth data in China could trigger bullishness for NZD. As with its counterpart, traders should be data-dependent.
Canadian dollar (CAD)
Short-term outlook: bearish.
The ongoing mortgage stress in Canada has forced the Bank of Canada (BoC) to be dovish, the first major bearish catalyst. With a rate cut last month, STIR markets have raised the probability to over 90% of the same next month.
Watch out for the upcoming data on the CAD inflation rate and retail sales this week.
Thanks to dollar weakness, the CAD continues to strengthen mildly. It now looks to test the next major support target (after breaking one at 1.35888) at 1.34780, while the major resistance is far ahead at 1.39468.
Long-term outlook: weak bearish.
Expectations of a rate cut remain the focal point, with the BoC governor Macklem himself saying it's reasonable to expect more cuts in the future. Moreover, STIR markets have priced in an additional cut sometime this year (aside from the one for next month).
The mortgage stress remains a major factor in this interest rate policy, and the BoC will have to cut rates to alleviate it.
However, encouraging oil prices, along with data improvements (the name of the game) may save the Canadian dollar's blushes.
Swiss franc (CHF)
Short-term outlook: bearish.
STIR markets forecast a rate cut in September (an 82% chance) and December this year.
Secondly, SNB expects a moderate improvement in inflation, GDP (Gross Domestic Product), and unemployment to rise slightly in the near term.
However, the Swiss franc can strengthen during geopolitical tensions like the Middle East crisis.
After a notable retracement, USD/CHF is looking to test the support area at 0.83326. Meanwhile, the major resistance level is far higher at 0.92244.
Long-term outlook: weak bearish.
The expected rate cut in the next SNB meetings for 2024 is the main bearish driver. However, the SNB's chairperson, Thomas Jordan, expressed that "appreciation of the Swiss Franc has an impact on monetary policy." This means that potential intervention by the central bank can go either way.
Conclusion
The fundamental outlooks of each currency have remained unchanged from the previous time. However, as expected, prepare for anything on the charts while aligning this activity with our expert fundamental summaries.
DxyWe can see that the market formed a nice impulse and correction, and now finishing up the last leg of bearish continuation. So more bearish momentum still expected moving forward.
DXYWe have a nice ascending channel with second rejection which indicaates that were short term bullish untill we get out last third rejection on our channel resistance.
DxyBullish momentum expected after taking out yesterday's low and the market price printed a nice w pattern structure which indicate the bulls are taking over. And price went to the neckline of the w pattern with a rejection candlestick which confirms our bullish momentum.
DXYEntry 5m
R/R2
Spike channel and tr in 15m
Big picture DXY is bearish so I trying to find bearish patern or setup.
Weekly outlook August 26-30 $DXYTVC:DXY is still falling as per the forecast. However, bullish divergence is forming on the daily. This leaves more room for consolidation above 100 levels. On the weekly, TVC:DXY is still on the downtrend
#DXY 1W chartLet's update our #Dxy 1W chart;
100$ already seen.
The pattern I mentioned before continues, I was wondering if it would only go up one more round, but it did not allow it.
* Weekly close came below the trend line.
* It gave a mismatch signal.
* For the first time in 2.5 years, it closed below the 200 EMA on a weekly basis.
After OB fills the resistance zone (gray box), it may rise again for an up retest.
If it closes below the blue line, the decline may deepen.
Why is DXY important for us?
Goodbye DXYMade this idea in June, should of published it. I think DXY sinks into the feds next easing cycle into 2025. Should find support around 90. This also aligns with the Yen carry trade as Japan is forced to sell US debt, The US has to buy the debt by printing money aka DXY debasement.
Dollar Index (DXY): Time to Recover?!
Dollar Index reached a significant daily horizontal structure support.
Its test made a bearish rally stop.
The market formed an inverted head and shoulders pattern on an hourly time frame
and just broke its neckline, leaving a clear bullish clue.
The price may bounce at least to 100.89
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Levels discussed on Livestream 26th August26th August
DXY: If IHS forms and break 100.80, could trade up to 101 and 101.10. If 100.80 holds as resistance, could trade down to 100 (if 100.50 is broken)
NZDUSD: Buy 0.6225 SL 20 TP 50
AUDUSD: Buy 0.6810 SL 20 TP 75 (Hesitation at 0.6850)
GBPUSD: Buy 1.3190 SL 40 TP 100
EURUSD: Buy 1.1175 SL 20 TP 75
USDJPY: Sell 143.25 SL 30 TP 100
USDCHF: Nothing for now, look for reaction at 0.8445
USDCAD: Could consolidate along 1.35 for now
Gold: Currently 2521 could trade up to 2530
DXY | 4H CHART >> Long OpportunityAnticipation Explained as follow:
-Price is at a Daily Discount.
-Break of Structure to the downside, leaving a FVG.
-This FVG is going to FAIL since it is at a Discount Price.
Here Is How Most Traders Are Going To Be Trapped
-Most traders are going to be looking to SELL at this FVG,
-So what's going to happen is that the price is going to break this FVG,
-Resulting in Inversion FVG(Failed FVG),
-And use it as SUPPORT to push the price higher.
In hindsight, Inversion gives us an indication that the market structure shift is confirmed before price even breaks the high
Where Is Price Going?
-Equal Highs
I HOPE YOU FIND THIS SETUP USEFUL, YOU CAN USE IT TO TRADE USD BASE PAIRS AND APPLY CORRELATION
Thank You!
DOLLER INDEX (Long)Turtle soup Trading Strategy
The Turtle Soup strategy, however, flips the script, aiming to profit when those anticipated trend.Linda Raschke’s Turtle Soup strategy is a counter-trend trading approach that capitalizes on failed breakouts.
It takes inspiration from the famous Turtles trading experiment, where novices were trained on a trend-following system.
DXY Is Going Up! Long!
Please, check our technical outlook for DXY.
Time Frame: 1D
Current Trend: Bullish
Sentiment: Oversold (based on 7-period RSI)
Forecast: Bullish
The market is testing a major horizontal structure 100.664.
Taking into consideration the structure & trend analysis, I believe that the market will reach 102.105 level soon.
P.S
The term oversold refers to a condition where an asset has traded lower in price and has the potential for a price bounce.
Overbought refers to market scenarios where the instrument is traded considerably higher than its fair value. Overvaluation is caused by market sentiments when there is positive news.
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