DXY fut. US Dollar possible weakening.
DXH25. There signs of weakness, but this support zone from 106.5 can consolidate pa and stop the US dollar descent. Measured move is a suggestion, in case it gets through.
DX1! trade ideas
4 Scenarios for Anticipating The Fed's PolicyBased on prevailing economic conditions and financial pressures
Scenario #1 | The Fed’s Policy and Its Implications
High Inflation Persists & Bank Liquidity Declines
Conditions:
Bank Credit grows slowly, while Deposits grow at a slower pace than Borrowings.
Cash Assets decline significantly, indicating a reduction in liquidity within the banking system.
Interbank lending rates rise, tightening funding among banks.
Inflation remains high, but economic growth slows.
Possible Fed Policy Responses:
Maintain high interest rates or increase further to curb inflation.
Reduce bond holdings through Quantitative Tightening (QT) to absorb liquidity from the financial system.
Open emergency lending facilities for banks to prevent panic in financial markets.
Impacts:
USD may strengthen as higher interest rates make dollar-denominated assets more attractive to global investors.
Increased pressure on banks, especially those heavily reliant on short-term funding.
Stock markets may experience a correction, particularly in interest rate-sensitive sectors such as technology and real estate.
Scenario #2 | Recession Starts to Surface & Credit Tightens
Conditions:
Bank Credit stagnates or turns negative, indicating that banks are restricting credit due to concerns about default risks.
Deposits stagnate, as investors prefer alternative assets such as bonds or gold.
Stock markets begin showing bearish pressure due to economic uncertainty.
Possible Fed Policy Responses:
Gradually lower interest rates to stimulate borrowing and investment.
End Quantitative Tightening (QT) and restart Quantitative Easing (QE) to inject liquidity into the markets.
Adjust bank reserve requirements to allow more flexibility in lending.
Impacts:
USD may weaken as lower interest rates reduce the attractiveness of dollar-denominated assets.
U.S. government bonds will become more attractive, causing bond yields to decline further.
Stock prices may rise, particularly in sectors that benefit from lower interest rates, such as technology and real estate.
Scenario #3 | Liquidity Crisis in the Banking System
Conditions:
Sharp declines in Cash Assets, causing some banks to struggle to meet short-term obligations.
Deposits exit the banking system, as public confidence in banks decreases.
Federal Funds Rate spikes, making interbank borrowing more difficult.
Possible Fed Policy Responses:
Provide emergency lending facilities for banks facing liquidity shortages, as seen during the 2008 and 2023 financial crises.
Lower interest rates in an emergency move if liquidity pressures worsen to maintain financial stability.
Collaborate with the FDIC to guarantee deposits and prevent bank runs.
Impacts:
Financial markets may experience high volatility, with potential panic selling in banking stocks.
Investors will flock to safe-haven assets such as gold and U.S. government bonds, causing their prices to surge.
Confidence in the USD may temporarily weaken, especially if the Fed injects large amounts of liquidity into the system.
Scenario #4 | Soft Landing - Stable Economy & Fed Policy Adjustments
Conditions:
Inflation is under control, and the economy continues to grow positively.
Bank Credit grows steadily, and bank liquidity remains adequate.
Stock markets remain calm, with no signs of panic in financial markets.
Possible Fed Policy Responses:
Keep interest rates stable for an extended period, with no drastic changes.
End Quantitative Tightening (QT), but avoid immediately restarting QE.
Collaborate with financial regulators to maintain banking system stability without major interventions.
Impacts:
USD remains stable, as no major monetary policy changes occur.
Lending rates remain in a moderate range, supporting investment and consumption growth.
Stock markets may gradually recover, particularly in sectors benefiting from stable monetary policies.
Anticipating The Fed’s Policy!
If liquidity declines and inflation remains high → The Fed is likely to maintain high interest rates & tighten monetary policy.
If a recession starts to emerge → The Fed may lower interest rates & ease monetary policy to support credit and investment.
If a liquidity crisis occurs → The Fed may bail out banks, lower interest rates, and stabilize the financial system.
If the economy remains stable → The Fed may hold interest rates & make only minor adjustments.
Recommendations:
Monitor The Fed’s statements and key economic data (CPI, PCE, NFP, GDP) to anticipate upcoming policy changes.
Analyze market reactions to monetary policy to identify trends in stocks, bonds, and USD.
Use bank liquidity and Borrowings data to assess potential liquidity constraints in the banking system.
If you have additional insights or different perspectives, I’d love to discuss them in the comments!
ICEUS:DX1! ICEUS:DXY CBOE:CBOE NASDAQ:CME TVC:US10Y
A subtle shift in sentiment suggest the USD rally has stalledIt seems everyone bullish the USD, waiting for its inevitable breakout above 110. But a subtle shift of bullish exposure to USD futures suggests the game is changing, and that a breakout may not be assured. Using market positioning from CME futures markets, dollar index and commodity FX charts, I take a closer look.
Matt Simpson, Market Analyst and City Index and Forex.com
MACRO FINANCIAL ANALYSIS | ASSETS & LIABILITIESICEUS:DX1! Financial data analysis from 11 main H.8 tables released on February 7, 2025 covers Assets and Liabilities of various types of banking institutions in the United States. This analysis covers large domestic banks, small domestic banks, and foreign institutions to provide a comprehensive understanding of the dynamics of the financial system.
Methodology
The analysis evaluates the growth of various asset and liability components, including Bank Credit, Deposits, Borrowings, Securities, Cash Assets, and Loans to Commercial Banks, as well as their impact on financial markets and the macroeconomy.
Impact on Financial Markets
Changes in financial markets include:
Stock Market: If bank liquidity declines due to a reduction in Cash Assets and an increase in Borrowings, banking stocks may experience pressure in several ways. First, higher funding costs due to increased Borrowings can reduce bank profit margins, making banking stocks less attractive to investors. Second, if liquidity tightens and banks restrict credit expansion, business sectors dependent on banking finance may slow down, negatively affecting financial sector stock indices and the broader economy. Third, stock market volatility may increase if investors anticipate uncertainty in bank funding strategies, potentially leading to sell-offs in banking stocks and further price declines.
Bond Market: If banks prefer investing in Treasury Securities over issuing loans, demand for government bonds increases, potentially driving bond yields lower. As a result, institutional investors may seek higher-yield alternatives, such as stocks or corporate bonds. Additionally, lower Treasury bond yields may push down long-term interest rates, benefiting the real estate sector and debt-based investments. However, if yields drop too low, banks may face tighter profit margins as lending rates also decline, potentially reducing banking sector profitability.
Forex Market: Tight bank liquidity and changes in interest rates can impact the USD exchange rate against major currencies in several ways. If liquidity declines and interest rates rise, the USD may strengthen due to increased demand for USD-denominated assets, offering higher returns. Conversely, if liquidity pressures lead to instability in the banking sector, global investors may lose confidence in the U.S. economy, weakening the USD. These changes can also increase currency market volatility and affect forex-based investment strategies.
Interbank Money Market: If Loans to Commercial Banks continue to decline, this may indicate reduced interbank confidence or changes in liquidity strategies, affecting short-term interest rate volatility.
Impact of Short-Term Interest Rate Volatility:
Uncertainty in Interbank Lending: If interest rate volatility increases, banks will be more cautious in providing short-term loans to other institutions, which may slow liquidity circulation within the financial system.
Higher Funding Costs for Banks: If volatility rises and interbank interest rates spike suddenly, banks highly exposed to short-term funding could face increased funding costs, potentially reducing their profit margins.
Impact on Credit to the Real Sector: If banks face uncertainty in short-term funding costs, they may adopt tighter lending policies, slowing credit growth to businesses and households.
Regulatory Intervention: If interest rate volatility becomes unmanageable, The Fed or other financial regulators may take measures such as open market operations to stabilize interest rates and maintain money market liquidity.
Impact on the Macroeconomy
Credit Growth and Investment: If Bank Credit grows more slowly, businesses and households may face limited credit access, potentially slowing investment and consumption.
Inflation and Monetary Policy: If liquidity pressures increase, The Fed may need to consider more accommodative monetary policies to prevent excessive credit tightening.
Example Measures:
- Lowering the benchmark interest rate to reduce borrowing costs for banks and businesses.
- Increasing asset purchase programs such as Quantitative Easing (QE) to inject liquidity into the financial system.
- Providing emergency lending facilities to banks under liquidity stress to stabilize money and banking markets.
- Adjusting bank reserve requirements to encourage credit expansion to the real sector.
Systemic Risk: If liquidity shortages in the banking sector persist, they could trigger systemic risks requiring intervention from regulators such as The Fed, FDIC, or OCC to stabilize financial markets.
Key Findings Summary
1. Trends in Bank Credit & Consumer Loans
✔ Bank Credit is growing moderately across all bank categories, with average growth of +3.2% to +5.5%, indicating stable credit expansion.
✔ Consumer Loans increased by +1.7% to +2.9%, with Credit Card loans rising faster (+5.0%), suggesting increased consumption through credit.
✔ Loans to Nondepository Financial Institutions surged by +8.8%, reflecting high confidence in non-bank financial entities.
✔ Automobile Loans declined by -2.3%, signaling weaker demand for auto financing.
Implication: If this trend continues, it could support consumption but also increase credit default risk.
2. Bank Liquidity & Interbank Lending
✔ Cash Assets declined by -4.8% to -10.4%, indicating potential liquidity constraints in the banking system.
✔ Loans to Commercial Banks dropped by -7.1% to -14.3%, suggesting shifts in interbank liquidity strategies.
✔ Federal Funds Sold & Reverse RPs increased by +3.1% to +7.8%, showing higher short-term liquidity activity.
Risk & Impact:
• Increased liquidity pressures can lead to higher interbank lending rates, raising funding costs for commercial banks.
• If this trend persists, banks heavily reliant on short-term funding may face solvency pressures.
• Worst-case scenario: If liquidity continues to decline and interest rates rise sharply, this could trigger systemic financial risks, prompting intervention by The Fed or other regulators such as FDIC (Federal Deposit Insurance Corporation) to guarantee deposits, OCC (Office of the Comptroller of the Currency) to enforce credit restrictions, or even the U.S. Treasury Department providing bailouts to distressed banks to maintain financial stability.
Possibility: Banks should strengthen liquidity management by extending funding maturities and reducing reliance on short-term money markets.
3. Deposits, Borrowings, and Bank Funding Strategies
✔ Deposits grew by +2.0% to +6.7%, reflecting continued confidence in the banking system.
✔ Large Time Deposits grew at a slower pace (+0.9% to +2.9%), indicating investors are seeking higher-yield alternatives.
✔ Borrowings increased by +6.7% to +7.3%, suggesting rising funding needs amid tighter liquidity.
Risk & Impact:
• Higher Borrowings can increase bank leverage, raising liquidity risk if short-term funding dries up.
• If Deposits grow slower than Borrowings, this could indicate early signs of reliance on external funding, potentially increasing funding costs and lowering profitability.
• Worst-case scenario: If this persists, some banks may need to aggressively raise deposit rates, tightening their profit margins further.
Possibility: Banks should diversify funding sources and implement risk management strategies to mitigate overreliance on external borrowing.
Some Possible Strategies That Will Be Carried Out By Various Roles
1. Regulator & Policy Maker Steps
✔ Monitor Borrowings and Deposits trends to determine whether monetary policy needs to be adjusted.
✔ Ensure there is a balance between credit expansion and liquidity stability to keep the financial system healthy.
✔ Evaluate the decline in interbank lending, which could be a sign of systemic risk in the banking sector.
2. Investor & Market Player Steps
✔ Surely will use bank securities holdings and cash positions data to identify investment opportunities.
✔ They will pay attention to Borrowings levels and deposit rates, as these can affect the profitability of the banking sector.
✔ And will monitor bank equity as an indicator of financial stability before making investment decisions.
3. Financial Institutions & Banks Steps
✔ Likely to revise funding and liquidity strategies to avoid excessive dependence on Borrowings.
✔ Or adjust the structure of loans and investments, taking into account changes in credit demand and preferences for Treasury Securities.
✔ Pay attention to leverage risk and credit risk management, especially in the face of economic uncertainty.
Key Points & Next Steps
✅ Both domestic and foreign banks continue to grow steadily, but liquidity pressures are increasing, requiring careful management.
✅ Investment in government securities is increasing, signaling a shift from credit issuance to safer assets.
✅ Customer confidence remains high, but slower deposit growth and increased lending could pose challenges going forward.
✅ Monetary policy and regulatory strategy will be closely monitored to maintain financial stability.
Possible Future Steps:
• Track liquidity trends and credit expansion to anticipate sectoral shifts.
• Monitor the Fed’s monetary policy decisions and their impact on banking and financial markets.
• Evaluate leverage and interbank lending risks as early indicators of potential financial instability.
Institutions Pull Back Their Funds From The FedDisclaimer : Geopolitical factors are currently a major concern.
This data analysis aims to serve as a fundamental basis derived directly from official sources to assess the USD exchange rate and the likelihood of future monetary policies under normal economic conditions, excluding geopolitical factors that create sentiment different from the actual economic conditions.
H.4.1 Report
FRED
CME FedWatch
Fed Balance Sheet:
Securities Held Outright: Increased by $38 million.
Reverse Repo (RRP): Significantly decreased by $51.875 million in the latest period.
Reserve Balances: Increased by $42.962 million.
TGA Data
Current balance: $809,154 million.
Change this week: Decreased by $8,799 million.
Change from last year: Decreased by $22,726 million significantly.
RRP
A significant decrease in the last 3 days, from $99.65 billion on February 10 to $67.82 billion on February 13, with a total decrease of -$31.83 billion.
M2 Money Supply Data:
M2 value as of December 2024: $21,533.8 billion.
Change from the previous month (Nov 2024): +$85.5 billion.
Change from last year (Dec 2023): +$808.4 billion.
Fed Interest Rate Decision:
Main decision: The Federal Reserve maintained the interest rate in the range of 4.25% - 4.50%.
Bank Reserve Interest Rate: Remains at 4.4%.
Primary Credit Rate: Remains at 4.5%.
The Federal Reserve will continue its Quantitative Tightening (QT) policy by continuing to reduce holdings of Treasury securities and MBS.
Market Expectations from CME FedWatch Tool:
Current target rate: 425-450 bps (4.25% - 4.50%).
Probability for an interest rate of 400-425 bps: 2.5%.
Probability for an interest rate of 425-450 bps: 97.5%.
Based on this analysis
The Federal Reserve has a policy to maintain interest rates stable in the range of 4.25% - 4.50%. Despite the significant decrease in Reverse Repo and the decrease in TGA, as well as the significant increase in M2 Money Supply, this policy is maintained to support economic stability and reduce excess liquidity in the market. The high probability (97.5%) of the market to maintain or increase the interest rate also reflects strong expectations for a conservative monetary policy by the Federal Reserve in the short term.
Impact on USD Overall
Based on the analysis of data from the Fed Balance Sheet, TGA, RRP, M2 Money Supply, and interest rate expectations, USD is likely to remain stable to strengthen in the short term, especially due to the tight monetary policy (Quantitative Tightening/QT) and the high probability of interest rates remaining in the 4.25%-4.50% range.
Components
RRP decreased significantly by -$31.83B in 3 days, liquidity increased, USD may weaken
A decrease in RRP means banks and financial institutions are withdrawing their funds from The Fed and are likely to move into other assets. This increases liquidity in the market, which may weaken the USD due to more dollars circulating, potentially lowering the exchange rate.
M2 Money Supply increased by +$808.4B YoY, liquidity increased, USD may weaken
A significant increase in M2 indicates more money circulating in the economy, which could pressure the purchasing power of the USD. If this growth continues, it resembles a loosening of monetary policy, which could weaken the USD in the long term.
The Fed remains with QT & does not lower interest rates, monetary contraction, USD may strengthen
The QT policy and no interest rate cuts indicate that the Fed still wants to control inflation and maintain tight monetary policy. This could attract investors to USD-based assets (Treasury Yields), keeping the USD strong compared to other currencies.
TGA decreased by -$8.8B weekly, -$22.7B YoY, liquidity increased, USD may weaken
A decrease in TGA balance indicates that the government is withdrawing funds for spending. This means more dollars entering the economy, which could add pressure to weaken the USD in the short term.
You can prepare a trading strategy based on the following scenarios:
Bullish USD if scenario: The Fed maintains QT, does not cut interest rates, and investors continue buying USD-based assets.
Neutral USD if scenario: The Fed maintains interest rates, but RRP & M2 Money Supply continue to rise.
Bearish USD if scenario: RRP continues to decrease drastically, M2 increases significantly, and the Fed starts considering interest rate cuts.
Short Term (1-3 months): USD is likely to remain strong due to tight monetary policy, but if liquidity continues to increase from RRP and M2, weakening could occur in the next quarter.
Long Term (6-12 months): If M2 continues to rise and the Fed changes its policy towards interest rate cuts, USD will gradually weaken.
Focus on market reactions to liquidity data such as RRP and M2.
If RRP drops drastically & M2 rises, USD weakens.
If the Fed maintains QT & high interest rates, USD remains stable.
Pay attention to the next FOMC Meeting & liquidity data (M2 & RRP) for further USD trend confirmation.
Important Note: Treat the above analysis as a fundamental basis in making your trading decisions. It is suitable for swing traders, but for the short term, it is important to consider geopolitical factors.
ICEUS:DXY ICEUS:DX1!
DXY Feb 2025All currencies appearing in this post are fictitious.
Any resemblance to real currencies, existing or dead, is purely coincidental.
USD Index. DXY (futures)
Interesting multiple rsi divergence accompanied with yesterday's harami candlesticks pattern in DXH.
Dollar in reversal zone
Max probability reversal zone reached.
Weekly double top.
Probable end of wC of B, reached 100% target.
IF DX starts showing weakness, we are in a good Risk/Reward position for riding a possible wave 3 or C to the downside next year.
The first target for this wave 3 or C would be $100 support, then the HVN around $95, then the wave 3 or extended C targets.
Why we're on guard for a USD pullbackStrong economic data for the US alongside expectations for the Fed to significantly reduce the pace of their easing cycle has been a main driver for USD bulls. And while the dollar could reach new high with the current backdrop, we're about to enter a phase of the year which greatly favours USD bears. Looking at monthly and daily seasonality patterns in December and forward returns for the USD around Fed meetings, I outline why a pullback - even idf only minor - could be due for the mighty greenback.
MS
Dollar Index Alert: Reversal Pattern Emerging – Learn MoreLuckily, I spotted a classic reversal pattern right on the edge of triggering.
The combination of three peaks, with the tallest in the middle, has formed a Head & Shoulders chart pattern on the Dollar Index futures daily chart.
The right shoulder is almost complete, and the bearish trigger will be activated if the price breaks below the Neckline (the line connecting the valleys of the Head), which sits under 105.30.
The target is calculated by subtracting the height of the Head from the Neckline breakdown point, giving us a target around 103.10.
The RSI indicator is also on the edge. Watch for a breakdown here as additional confirmation.
Who knows, we'll get back in!After breaking first attempt, which I called as temporary correction. (see previous post)
We tried to get back in there once, didn't happen.
Maybe we go in second time again.
is this the top?dx1!, dxy, us dolla - is nearing a top.
do with this information what you will, but thought i'd let you know just in case you were wondering.
---
it is possible this fifth wave sees an expansion,
and if it does, the situation in the global markets can substantially worsen.
>let's not go there unless we need to.
✌
What if the USD rally is only just getting started?The USD rally has entered its seventh week and continues to defy its seasonal tendency to weaken in Q4. And that is simply because the macro backdrop 'Trumps' its average performance this time of the year. Today I take a step back to admire the bigger-picture view of the USD index, to show why I think this rally could still just be getting started.
MS
DX! is currently showing a bullish trendPrice Volatility: From January to early March 2023, DX! experienced fluctuations with an initial drop followed by a rise and then another decline. The lowest point was around 102.75 at the end of January, while the highest point reached 108 in mid-February.
Support and Resistance:
Support Level: The lowest point of 102.75 during this period indicates strong support at that price level.
Resistance Level: The highest point of 108 shows significant resistance at that level.
Overall Analysis
Currently, DX! is in a rebound phase but may face resistance near 105.34. If it breaks through this resistance level, there will be further upside potential; however, if it fails to break through, it may retest the support level around 102.70.
It is important to note that based on seasonal data, November and December tend to perform poorly, so there may be short-term downside risks.
In conclusion, DX! is currently showing a bullish trend, but close attention should be paid to resistance levels and volume changes to determine whether the upward momentum can continue.
COT Analysis - Currencies - DXY 6E & 6M SET UP FOR TRADES!COT analysis shows that the Euro and Mexican peso are nicely setup for longs upon a confirmation of bullish trend change on the daily. The only "fly in the ointment" here is that the DXY commercial positioning is still very bullish, which is a bit of a mixed signal. Ideally, we like to see the DXY & majors give opposing signals simultaneously.
That being said, 6E & 6M are nicely setup for longs upon a confirmed daily bullish trend change.
Have a good week.
Dollar Index Daily Channel Breakout PossibilitiesWhen we observe the first day of the month as an opening channel, we see the Dollar Index has significant moves when breaking out of those channels.
In the current market, approaching the US elections, the DXY is at a critical point and looks set to continue its bullish run.
However, we will be waiting until the end of the 1st Day of November to establish a new channel and waiting for breakouts on either side.
US Dollar UpdateAfter several weeks of rallying, the US Dollar Index is showing signs of potential profit-taking. 📉 Here's why:
• Reached the 200-day moving average 📊
• Hit the 61.8% retracement from the June-September drop 🔄
• Daily RSI is overbought at 83 📈
On the weekly chart, the market is also hitting key resistance levels:
• 55-week moving average 📅
• Peaks from 2017 and 2020 📊
Formidable resistance is in play, so we may see some profit-taking soon. If you're in, consider raising your stops! 🚀
Disclaimer:
The information posted on Trading View is for informative purposes and is not intended to constitute advice in any form, including but not limited to investment, accounting, tax, legal or regulatory advice. The information therefore has no regard to the specific investment objectives, financial situation or particular needs of any specific recipient. Opinions expressed are our current opinions as of the date appearing on Trading View only. All illustrations, forecasts or hypothetical data are for illustrative purposes only. The Society of Technical Analysts Ltd does not make representation that the information provided is appropriate for use in all jurisdictions or by all Investors or other potential Investors. Parties are therefore responsible for compliance with applicable local laws and regulations. The Society of Technical Analysts will not be held liable for any loss or damage resulting directly or indirectly from the use of any information on this site.
DXY Top Down AnalysisUtilizing the very effective and non-discretionary MAC strategy, coupled with lower timeframe divergences for entries, we take a look at DXY from the Quarterly, Monthly & Weekly perspective.
Have a great weekend.
DXY LongAll biases are green, and money is flowing back into the DXY. Bullish for the upcoming week. EUR/GBP/USD short."
Cycle Analysis - Dollar IndexI am SETUP to hunt long TRIGGERS in the DX this week based on the COT strategy.
So I thought I'd look, do cycles support the COT strategy looking for Longs?
It turns out, they do.
Decennial & Annual Predictable Zones (APZ's) supportive of up move to Early/Mid October
Intermarket analysis finds a striking 60.9% correlation to DX's current price action to that of the price action found in 1991. Based on the intermarket analysis, we expect a major cyclical low sometime around now.
The long term blend of the 51.5 month & 581 day cycles show a major cyclical low should be around the corner for DX.
The short term blend of the 20.6, 29.9 & 115.6 day cycle is supportive of longs until a short term cyclical high early-mid October.
DXY StrengthDXY has hit the weekly demand zone
commercials are buying heavily from this zone after the COT report release
Retailers are bearish
also a gap should be filled on the futures chart which could also lead to strength from here
seasonality is still up trending for this month
Remember to buy when there is blood on the street "all retailers are supporting sell because of the noise of the news" so expect the contrary
Trade safe
DX! here's a slight bearish bias in the short term
Price Action:
The current price is 100.470, showing a recent downward trend.
A support zone is marked on the chart between 102.000 and 102.700, indicating potential support at this level.
Volume:
Trading volume has increased in recent weeks, suggesting heightened market interest in the dollar index.
Seasonal Analysis:
The table at the bottom shows historical performance for different months.
For example, September typically has a positive return (average 3.21%), while October's performance is more neutral (average 0.98%).
Technical Indicators:
The recent decline may find support in the marked support zone.
If the price breaks below the support area, it could lead to further downside.
In summary, the U.S. Dollar Index is currently near a key support area. Traders should closely monitor price action around this zone and volume changes to gauge future direction. The seasonal trend suggests a potential for positive performance in the coming months, but this should be considered alongside other factors.
For the short-term outlook, it's crucial to watch how the price behaves near the support zone. A bounce from this area could indicate a potential reversal, while a break below might signal further weakness. The increased volume suggests that significant price moves may be imminent.
Given the current market conditions and the chart analysis, there's a slight bearish bias in the short term, especially if the support zone doesn't hold. However, any significant economic data releases or geopolitical events could quickly alter this outlook. Traders should remain vigilant and adapt their strategies based on how the price reacts to the key support level and any upcoming market-moving events.
Why the US dollar bear should tread with careThe USD saw a sharp reversal higher despite a 50bp cut, simply because the markets were positioned for a more dovish dot plot. I have argued in prior analysis the USD exposure is a bit stretched over the near-term, so perhaps shorting the USD is getting a bit stale. We also have several key markets at inflection points after a risk event. Matt Simpson takes a technical look.
