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EUR/USD Daily Price Chart Analysis: A High-Probability SetupThe EUR/USD currency pair is navigating a critical moment, presenting an intriguing setup for traders and investors alike. For those looking to capitalize on the next big move, this analysis dives deep into the technicals, offering actionable insights while balancing education with practicality. But before we proceed, a quick disclaimer: trading always carries risk, and this analysis should be viewed as a guide, not financial advice. Make sure to trade responsibly and perform your due diligence. At the heart of this setup lies the "Super Cluster" zone, a pivotal support area near the 1.0365 level. This zone isn't just a random line drawn on the chart—it represents a confluence of powerful technical factors. First, it aligns with a key horizontal level that has halted bullish momentum in the past. Second, it coincides with a long-term descending trendline that has defined the pair's downward trajectory since mid-2023. Such convergence makes this area a stronghold for buyers. If the Super Cluster holds, it could provide the foundation for a significant bullish reversal. However, if it breaks, the bears could take control and push prices even lower. The bullish scenario is reflected by the green upward trendline projected on the chart. This path anticipates a strong recovery, with initial targets around 1.1200, a level marking the upper boundary of the descending channel. Longer-term, a push toward the 1.2000 region could materialize if the bullish momentum sustains. There are several factors supporting this outlook. Notably, the Relative Strength Index (RSI) is currently flashing a bullish divergence—a signal that often precedes reversals. While the price has been making lower lows, the RSI has been quietly climbing, hinting at weakening bearish momentum. Additionally, the 21 EMA (orange) and the 89 EMA (red) 3 legs fractal intersections appear to be in place. This little known signal, if confirmed, could attract further buying interest and signal a broader trend shift. But what if the bullish thesis fails? A break below the Super Cluster zone would be a game changer. Such a move would invalidate the bullish outlook and open the door to further downside pressure. In this scenario, the EUR/USD could retest the psychologically significant 1.0000 level or even lower. This underscores why patience and proper confirmation are essential before committing to a trade. Waiting for daily or weekly candle closes near key levels can help avoid false breakouts or premature entries. Zooming out, the broader chart reveals a descending channel that has confined the EUR/USD since 2023. The current setup suggests the pair is at the lower boundary of this channel, reinforcing the importance of the Super Cluster as a make-or-break zone. Additionally, past price action reveals a pattern of alternating impulse waves and corrective phases. If the Super Cluster supports a bounce, the next impulse wave could test or even break the channel's upper boundary, leading to a significant bullish move. One standout feature of the current chart is the RSI, which is hovering near 40. While not yet bullish, the RSI's upward divergence from price provides a strong signal that bears are losing steam. A move above 43 would confirm bullish momentum and align with the green upward trajectory. Swing traders may want to monitor this closely as it could act as a key trigger for entry. For those looking to trade this setup, the strategy will vary depending on your style. Swing traders might wait for confirmation of a bounce off the Super Cluster zone, looking for bullish candlestick patterns such as pin bars or engulfing candles. A break above your key level would further confirm bullish momentum, setting up targets near 1.1200 or higher. On the other hand, long-term investors could consider scaling into positions at current levels, provided the Super Cluster holds over several days or weeks. Regardless of the approach, risk management is non-negotiable. Stops for bullish positions should be placed just below the 1.0365 level, ensuring minimal loss if the setup fails. In summary, the EUR/USD is poised at a key technical juncture, offering a high-probability setup for those who approach it with patience and discipline. While the bullish case appears more favorable, thanks to RSI divergence and the Super Cluster's significance, traders must remain vigilant. The market can move in unexpected ways, and success often lies in reacting to what the chart is telling us—not what we wish it would say. Let the market show its hand. A bounce from the Super Cluster could mark the start of a powerful upward move, while a breakdown might lead to more bearish momentum. Whichever way the market moves, be prepared, trade with a plan, and remember that risk management is the foundation of long-term success. Disclaimer: This analysis is for educational purposes only and should not be considered financial advice. Trading involves risk, and past performance is not indicative of future results.
Long
by Kenayi
1
Will the Dollar Index Redefine Global Economic Equilibrium?In the intricate dance of international trade and geopolitical strategy, the Dollar Index emerges as a critical compass navigating the turbulent waters of economic uncertainty. The article illuminates how this financial barometer reflects the profound implications of proposed tariffs by the U.S. administration, revealing a complex interplay of currencies, trade relationships, and global market sentiments that extend far beyond mere numerical fluctuations. The proposed tariffs targeting key trading partners like Canada, Mexico, and China represent more than economic policy—they are strategic maneuvers with potential seismic shifts in global trade dynamics. As the Dollar Index climbs, reflecting the U.S. dollar's strength, it simultaneously exposes the delicate balance of international economic relationships. The potential consequences ripple through supply chains, consumer markets, and diplomatic corridors, challenging the post-World War II trade paradigm and forcing nations to recalibrate their economic strategies in real time. Beyond the immediate market reactions, these developments signal a broader philosophical question about economic sovereignty and interdependence. The tariff proposals challenge long-established multilateral agreements, potentially accelerating a transformation in how nations perceive economic collaboration. While the immediate impact is visible in currency fluctuations and market volatility, the long-term implications could reshape global economic architecture, prompting a reevaluation of the U.S. dollar's role as the predominant global reserve currency and testing the resilience of international trade networks.
INDEX:DXYLong
by signalmastermind
Gold Lost Steam as New US Administration to Take World StageCOMEX: Micro Gold Futures ( COMEX_MINI:MGC1! ) On Monday, gold prices tumbled 3% on reports of Israel-Hezbollah ceasefire and the nomination of Scott Bessent as the U.S. Treasury Secretary. Spot gold fell 3.4% to $2,619.43 per ounce. COMEX gold futures shed 3.4% to $2,620.8. As a safe-haven investment, gold holds strong appeal with the rise of geopolitical crisis. After the US presidential election, investors anticipated that both the conflicts in Ukraine and the Middle East neared end. The new Treasury pick reduces the risk of escalating trade conflicts, as we have seen in Mr. Trump’s first term. Overall, gold falls on anticipation of lower geopolitical risks in the second Trump presidency. Where would gold prices go from here? I find it useful to analyze the 5-year price trends and identify key factors driving gold prices up and down. From December 2019 to October 2024, golds prices rose 88%. Gold’s recent plunge started in late October, as market anticipated a Trump win. During this five-year period, gold prices have seen significant rises for five times, and major pullbacks for four times. Gold Bull Trends and the Key Drivers: • When the COVID pandemic broke out in January 2020, gold prices rose sharply, and the stock market plummeted. This highlights gold's safe-haven investment function. • In February 2022, gold prices rose in response to the outbreak of the Russia-Ukraine conflict. Geopolitical crisis was the key driver. • High inflation in the US, peaked at a 9.1% CPI in July 2022, pushed gold prices to record high. Gold is considered a good hedge for inflation. • In October 2023, the Hamas-Israeli conflict broke out. Gold rallied again as a safe-haven investment. • The U.S. Federal Reserve cut interest rates by a massive 50 basis points at its September 2024 policy meeting, followed by another 25-bp cut in November. With the expectation of more Fed cuts, gold started a new rally in July 2024. The trade logic: Fed cuts reduce the rate of return on interest-bearing assets such as Treasury bonds and bank deposits, which on turn makes gold investment more appealing. Gold Bear Trends and the Key Drivers: • China resumed manufacturing activities relatively soon after the pandemic. While the U.S. and Europe were still on lockdown and standstill, Chinese goods were exported to fill the gap. This helped lower the perceived risk of an once-a-century health crisis. Gold prices pulled back as a result. • The Russia-Ukraine conflict entered a stalemate. It did not spread to other European countries and escalated into World War 3. The geopolitical crisis has subsided, and as a result, gold prices withdrew from advancing. • After the Fed hiked rates 11 times in a row, US inflation has finally cooled down. Gold completed its mission as inflation hedge. Consequently, investors pulled money out of gold and into stocks, causing gold prices to fall. Trade Setup with Micro Gold Futures On November 5th, Mr. Trump won by a landslide and was re-elected as the 47th U.S President. In the following three weeks, he quickly completed the nomination of 15-member Cabinet in his new administration. Based on campaign promises and new Cabinet picks, investors interpret the new Trump policy in a series of the so-called "Trump trades". In my own opinion, these include strong US dollar, weak gold prices and a secular bull market for cryptocurrencies. • The ascension of a political strongman could bring about ceasefires in both the Russia-Ukraine front and the Middle East. As we recall the relatively peace time during the first Trump term, the expected de-escalation of geopolitical crises in his second term could drive gold prices down in the next four years. • The "America First" policy is bullish for US dollar. 1) Bringing manufacturing back onshore would strengthen U.S. economy. 2) High tariffs would reduce trade deficits overtime, although inflation may go up in the short term. 3) Slashing fiscal spending by $2 trillion a year would shore up the government coffer. Combined, these policies would defend the dollar's status as an international reserve currency. The dollar index has risen from 103 to 107 in the past month. A strong dollar is bearish for the dollar-denominated gold, as foreign investors would pay more with foreign currencies. • Mr. Trump is a strong supporter of cryptocurrencies. In the past three months, bitcoin has doubled in prices from $50,000 to nearly $100,000. The campaign promise to establishment of a central bank reserve for bitcoin, if materialized, would push crypto prices significantly higher in the next four years. The CFTC Commitments of Traders report shows that on November 19th, total Open Interest (OI) for Gold Futures is 502,952 contracts, down 33,029 or -6.2% from prior week. Leading the position cutback is Managed Money, which reduces 10,306 (-5.1%) in long positions and 15,911 (-25.6%) in spreading positions. Movement of the “Small Money” is a good indicator of future price trend. Based on the above analysis, if a trader is bearish on gold prices, he could express his opinions by shorting the COMEX Micro Gold Futures ( AMEX:MGC ). MGC contracts have a notional value of 10 troy ounces. With Monday settlement price of 2,712.2, each December contract (MGCZ4) has a notional value of $27,122. Buying or selling one contract requires an initial margin of $1,150. The MGC contracts are very liquid. On Monday, MGC has a daily trade volume of 178,663 contracts and an Open Interest of 51,364. Hypothetically, if gold prices pull back 5% further to 2,576.6, a short position would gain $1,356 (=135.6 x $10). Using initial margin as cost base, a theoretical return would be +118% (= 1356 / 1150). The risk of shorting futures is a rise on gold prices. Investors could lose part or all of their initial margin. Happy Trading. Disclaimers *Trade ideas cited above are for illustration only, as an integral part of a case study to demonstrate the fundamental concepts in risk management under the market scenarios being discussed. They shall not be construed as investment recommendations or advice. Nor are they used to promote any specific products, or services. CME Real-time Market Data help identify trading set-ups and express my market views. If you have futures in your trading portfolio, you can check out on CME Group data plans available that suit your trading needs www.tradingview.com
COMEX_MINI:MGC1!Short
by JimHuangChicago
2
How Will a Strong Dollar Impact Emerging Forex Pairs?Persistent US dollar strength is poised to pose significant challenges for emerging market (EM) bonds and forex. As the greenback continues its upward trajectory, investors are advised to exercise caution and consider potential risks. Why a Strong Dollar Matters for Emerging Markets A stronger dollar generally makes it more expensive for emerging market countries to service their dollar-denominated debt. They need to exchange their local currency for US dollars to make payments. When the dollar appreciates, it requires more of their local currency to acquire the necessary amount of dollars. Furthermore, a strong dollar can deter foreign investment in emerging markets. Investors may prefer to invest in US assets, which are perceived as safer and more stable. This can lead to capital flight from emerging markets, putting pressure on their currencies and economies. Potential Risks for Emerging Market Bonds and Forex Investors in emerging market bonds should be aware of the following risks: 1. Currency Risk: A weaker local currency can erode the value of bond investments. As the dollar strengthens, emerging market currencies may depreciate, reducing the value of bond holdings when converted back to the investor's home currency. 2. Interest Rate Risk: Rising interest rates in the US can lead to higher borrowing costs for emerging market countries. This can increase their debt burden and make it more difficult to service their debt obligations. 3. Default Risk: In extreme cases, a strong dollar and rising interest rates can push emerging market countries to the brink of default. This can result in significant losses for bondholders. How to Mitigate Risks While the risks associated with emerging market bonds are significant, investors can take steps to mitigate them: 1. Diversification: Diversifying investments across different emerging markets can help reduce exposure to specific country risks. 2. Currency Hedging: Investors can use currency hedging strategies to protect themselves from currency fluctuations. 3. Credit Rating Analysis: Carefully analyzing the creditworthiness of issuers can help identify bonds with lower default risk. 4. Consult with Financial Advisors: Seeking advice from experienced financial advisors can provide valuable insights and help develop a suitable investment strategy. Conclusion The persistent strength of the US dollar poses a significant threat to emerging market bonds. Investors should be mindful of the risks associated with these investments and take appropriate measures to protect their portfolios. By diversifying, hedging, and conducting thorough due diligence, investors can navigate the challenges posed by a strong dollar and potentially reap the rewards of emerging market growth. It is important to note that this article is for informational purposes only and should not be construed as financial advice. Always consult with a qualified financial advisor before making any investment decisions.2
TVC:DXYLong
by bryandowningqln
Understanding the U.S. Dollar IndexThe U.S. Dollar Index (USDX) is a critical tool for traders, investors, and economists alike, as it provides a measure of the overall strength of the U.S. dollar relative to a basket of major foreign currencies. The image shared highlights the core elements of the U.S. Dollar Index: its history, composition, calculation, and its economic implications. In this article, we’ll delve into what the USDX is, why it matters, and how you can trade or invest in it. What Is the U.S. Dollar Index? The U.S. Dollar Index is a numerical representation of the U.S. dollar's value compared to a basket of foreign currencies. It serves as a benchmark to measure the dollar's strength in the global economy. The USDX is calculated using exchange rates and reflects the dollar’s performance against six major world currencies. The index is maintained and traded in financial markets, offering investors a way to speculate on or hedge against changes in the dollar’s value. A rising USDX indicates a stronger dollar, while a declining USDX signals a weakening dollar. History of the USDX The U.S. Dollar Index was established in **1973** by the Intercontinental Exchange (ICE) shortly after the Bretton Woods Agreement was dissolved. This agreement, which pegged global currencies to the U.S. dollar and gold, collapsed, leading to floating exchange rates. The initial value of the USDX was set at 100. Over the years, the index has fluctuated based on the economic conditions, monetary policies, and geopolitical events influencing the U.S. dollar’s demand and supply. Its all-time high was approximately 164.72 in 1985, while its lowest was 70.698 in 2008. Why Does the Strong Dollar Matter? A strong dollar impacts the global economy in numerous ways: 1. Trade Impacts: A stronger dollar makes U.S. exports more expensive for foreign buyers, potentially reducing demand for American goods. Conversely, imports into the U.S. become cheaper, which can benefit American consumers. 2. Economic Implications: For emerging markets, a strong dollar increases the burden of dollar-denominated debt, as countries must repay loans in a currency that has gained value. 3. Investment and Market Effects: A rising dollar tends to attract foreign investors to U.S. assets like Treasury bonds, increasing demand for the currency further. However, it can also pressure commodities like gold and oil, which are priced in dollars. Understanding the dollar’s strength through the USDX helps businesses, traders, and governments make informed financial and economic decisions. What Does the Dollar Index Tell You? The Dollar Index provides insights into: Market Sentiment: A rising USDX signals increased confidence in the U.S. economy, while a declining index indicates weaker sentiment. Monetary Policy Expectations: The USDX often moves in anticipation of Federal Reserve policy changes, such as interest rate hikes or cuts. Global Economic Health: The index indirectly reflects how the global economy interacts with the dollar, as it is the world’s primary reserve currency. Traders use the USDX as a tool to gauge the relative strength of the dollar in real-time, helping them make informed decisions in currency, commodity, and equity markets. What Currencies Are in the USDX Basket? The U.S. Dollar Index measures the dollar’s performance against a **basket of six major currencies**, each with a specific weight in the calculation: 1. Euro (EUR)~57.6% weight 2. Japanese Yen (JPY)~13.6% weight 3. British Pound (GBP)~11.9% weight 4. Canadian Dollar (CAD)~9.1% weight 5. Swedish Krona (SEK)~4.2% weight 6. Swiss Franc (CHF)~3.6% weight The dominance of the euro in the basket highlights the close economic ties between the U.S. and the European Union. Other currencies in the basket represent major global economies and trading partners. How to Invest or Trade in the Dollar Index There are several ways to invest in or trade the USDX: 1. Futures and Options: The USDX is traded as a futures contract on the Intercontinental Exchange (ICE). Futures and options on the USDX allow traders to speculate on the dollar’s movements or hedge against currency risks. 2. Currency Pairs: Trading major currency pairs, such as EUR/USD or USD/JPY, offers indirect exposure to the dollar index. For instance, if the USDX is rising, the EUR/USD pair is likely falling. 3. Exchange-Traded Funds (ETFs): Some ETFs track the performance of the U.S. Dollar Index, providing an accessible way for investors to gain exposure without directly trading futures. 4. Forex Market Spot forex trading allows traders to speculate on the dollar’s strength against specific currencies in the USDX basket. 5. Commodities: The USDX indirectly affects commodities like gold and oil. A strong dollar typically puts downward pressure on these assets, offering additional trading opportunities. Limitations of the U.S. Dollar Index While the USDX is a valuable tool, it has some limitations: Narrow Currency Basket: The index only measures the dollar against six currencies, primarily from developed markets. It doesn’t account for emerging market currencies like the Chinese yuan, which are increasingly important in global trade. Euro Dominance: The euro’s large weighting means the index heavily reflects the euro-dollar relationship, potentially overlooking other factors influencing the dollar’s global strength. Static Composition: The basket has not been updated since its creation, which means it doesn’t fully reflect changes in the global economic landscape over the past decades. Ending thoughts The U.S. Dollar Index is a vital tool for understanding and navigating the global financial markets. By tracking the dollar’s performance against a basket of major currencies, the USDX provides insights into market sentiment, monetary policy expectations, and economic trends. Whether you’re an investor, trader, or policymaker, understanding the USDX can help you make informed decisions. If you’re looking to invest or trade the dollar index, there are multiple avenues to explore, from futures contracts and ETFs to spot forex trading. However, always consider the limitations of the index and ensure your strategies account for its biases and composition. The U.S. dollar remains the cornerstone of the global economy, and the USDX is your window into its strength and influence.
TVC:DXYEducation
by pow_removetheguesswork
Bearish Divergence Between DXY US Dollar Index & RSIThe DXY is butting up against a zone of significant resistance, and a bearish divergence between the index and the relative strength index suggests that buying pressure is fading here. A sharp correction in the dollar could have significant implications for gold, silver and other commodities. Today we saw a rally in the DXY on a safe haven bid following news of escalation in Ukraine. If a major conflict between NATO and Russia really does break out, investors may learn the hard way that fiat currencies in fact do not make the best safe havens.
TVC:DXYShort
by smartsilverstacker
Navigating the Gold Market: Tips for Investors Gold, often hailed as a safe-haven asset, is increasingly finding itself at the mercy of two powerful forces: China and the U.S. dollar. As these two economic giants influence global markets, their actions have a direct impact on the price of gold. China's Growing Appetite for Gold China's insatiable demand for gold has been a significant driver of the yellow metal's price. The country's burgeoning middle class, coupled with its cultural affinity for gold, has fueled a surge in gold consumption. This demand is not limited to jewelry; it extends to investment purposes as well. China's central bank, the People's Bank of China (PBOC), has also been a major buyer of gold. By diversifying its foreign exchange reserves, the PBOC aims to reduce its reliance on the U.S. dollar and mitigate risks associated with geopolitical tensions. As China continues to accumulate gold, it exerts significant influence over the global gold market. The Dominance of the U.S. Dollar The U.S. dollar, as the world's primary reserve currency, holds immense sway over the global economy. Its value relative to other currencies, often referred to as the "dollar index," has a significant impact on the price of gold. When the dollar strengthens, it typically leads to a decline in the price of gold. This is because gold is priced in U.S. dollars. As the dollar appreciates, it becomes more expensive for foreign investors to purchase gold, which can dampen demand and put downward pressure on prices. Conversely, when the dollar weakens, gold often appreciates. A weaker dollar makes gold more affordable for foreign buyers, stimulating demand and driving up prices. The Interplay Between China and the U.S. Dollar The interplay between China's growing demand for gold and the strength of the U.S. dollar creates a complex dynamic that can impact the price of gold. • Competing Forces: China's demand for gold can support prices, while a strong U.S. dollar can exert downward pressure. • Geopolitical Tensions: Geopolitical tensions between the U.S. and China can exacerbate market volatility and impact the price of gold. • Global Economic Conditions: Global economic conditions, such as inflation, interest rates, and economic growth, can also influence the demand for gold. The Future of Gold The future of gold remains uncertain, but China and the U.S. dollar will continue to play a significant role in shaping its price. As China's economy grows and its influence on the global stage increases, its demand for gold is likely to remain strong. However, the strength of the U.S. dollar will also be a key factor. If the dollar strengthens significantly, it could put downward pressure on gold prices. Conversely, a weakening dollar could support gold prices. In conclusion, gold's future is intertwined with the economic and geopolitical landscape. While it remains a valuable asset, investors should carefully consider the impact of China and the U.S. dollar on its price. Diversification and a long-term investment horizon may be prudent strategies for those seeking exposure to gold. Additional Factors Affecting Gold Prices • Inflation: Gold is often seen as a hedge against inflation. As inflation rises, the purchasing power of fiat currencies declines, making gold an attractive investment. • Interest Rates: Higher interest rates can reduce the appeal of gold, as investors may prefer to invest in interest-bearing assets. • Market Sentiment: Investor sentiment and market psychology can significantly impact gold prices, especially during periods of economic uncertainty. • Supply and Demand Dynamics: Global gold production and demand can influence prices. Changes in mining production or shifts in consumer demand can affect supply and demand dynamics. By understanding the interplay of these factors, investors can make more informed decisions about investing in gold.
OANDA:XAUUSD
by bryandowningqln
Dollar's Rise, Gold's Demise◉ Abstract The US Dollar Index (DXY) and gold prices have a historically inverse correlation, with a stronger dollar typically reducing gold demand. Key drivers of this relationship include inflation, geopolitical tensions, and interest rates. With a 73-95% negative correlation observed over time, investors should note the current market outlook: the DXY is poised to break out above 107, potentially surging to 114, while gold prices may drop 5% to 2,400 and then 2,300. Understanding this dynamic is crucial for making informed investment decisions and capitalizing on potential trading opportunities. ◉ Introduction The relationship between the U.S. Dollar Index (DXY) and gold prices is significant and typically characterized by an inverse correlation. Understanding this relationship is crucial for investors and traders in the gold market. ◉ U.S. Dollar Index Overview The U.S. Dollar Index measures the value of the U.S. dollar against a basket of six major foreign currencies, including the euro, Japanese yen, and British pound. It serves as an indicator of the dollar's strength or weakness in global markets. When the index rises, it indicates that the dollar is gaining value relative to these currencies, while a decline suggests a weakening dollar. ◉ Inverse Relationship with Gold Prices Gold is priced in U.S. dollars on international markets, which directly influences its price based on fluctuations in the dollar's value: ● Strengthening Dollar: When the DXY index increases, it generally leads to a decrease in gold prices. This occurs because a stronger dollar makes gold more expensive for investors using other currencies, thereby reducing demand. ● Weakening Dollar: Conversely, when the DXY index falls, gold prices tend to rise. A weaker dollar makes gold cheaper for foreign investors, increasing its demand and driving up prices. Research indicates that this inverse relationship has been consistent over time, particularly in long-term trends. For instance, historical data shows that gold prices often rise when the dollar depreciates, reflecting a negative correlation of approximately 73% to 95% over various time intervals. ◉ Short-Term Deviations While the long-term trend supports this inverse relationship, short-term anomalies can occur under specific market conditions. For example, during periods of extreme volatility or economic uncertainty, gold and the dollar may exhibit a positive correlation temporarily as both assets are sought after as safe havens. This behaviour can confuse investors who expect the typical inverse relationship to hold. ◉ Additional Influencing Factors Several other factors also affect gold prices beyond the dollar's strength: ● Inflation: Rising inflation often leads investors to flock to gold as a hedge against currency devaluation. ➖ E.g. In 2022, as inflation rates surged to 9.1%, demand for gold increased by 12% year-over-year, pushing prices higher. Historical data shows that during periods of high inflation from 1974 to 2008, gold prices rose by an average of 14.9% annually. ● Geopolitical Events: Uncertainty from geopolitical tensions can drive demand for gold regardless of dollar fluctuations. ➖ E.g. In late 2023, escalating conflicts such as the Israel-Palestine situation and the ongoing Russia-Ukraine war contributed to a surge in gold prices, with reports indicating increases of over 3% in a week due to these tensions ● Interest Rates: When the Fed raises interest rates, it typically strengthens the dollar as higher yields attract foreign capital. A stronger dollar makes gold more expensive for holders of other currencies, which can reduce demand. ➖ E.g. During the Federal Reserve's rate hikes from March 2022 to early 2023, many investors moved away from gold as they sought higher returns from bonds and other fixed-income securities. This shift contributed to downward pressure on gold prices during that period. ◉ Technical Standings ● U.S. Dollar Index TVC:DXY The US Dollar Index has been stuck in neutral for two years. But if it clears the 107 hurdle, get ready for a surge to 114. ● Gold Spot/USD OANDA:XAUUSD ➖ Gold prices skyrocketed to 2,790, then plunged. Expect a 5% drop to 2,400. If that support cracks, 2,300 is the next safety net.
TVC:DXYEducation
by NaranjCapital
This is the only Dollar chart you’ll need for 2025The current strong recovery of the US dollar is largely Trump-related, as his policies suggest that the economy could expand, potentially leading to higher inflation and rates to counteract it. It’s important to recognize that this move since the end of October is a type of euphoria or optimism surrounding Trump. However, once Trump actually takes office, we may see new flows and trend directions emerge. In Trump’s previous term, the dollar turned lower quite aggressively, topping in December 2016/ January 2017. I’m wondering if we could see a similar price action this time. In Elliott wave terms, we should definitely be aware of a potential reversal. Looking at the current chart, we see five waves down followed by an ABC recovery—the most basic and clear Elliott wave structure. The five-wave decline signals a bearish trend starting in 2022/23, and the current pause could set up for another drop in the dollar. Always when you track a correction or a counter-trend move, watch for a three-wave pattern before concluding that the dollar has reached a resistance point. Currently, wave C is still ongoing, possibly in its late stages, though it hasn’t yet reached the 108 level, which is likely an important reversal area. This zone aligns closely with the 61.8% Fibonacci level, a key for the final stages of corrective retracement. To me, this suggests that the dollar could potentially sell off next year. Now, you may be wondering what this means for other markets. It depends on the catalyst behind the dollar’s turn. If a recession triggers it, stocks might also face downside pressure. Alternatively, if the dollar weakens due to extreme inflows into other assets, particularly stocks, then equities could continue pushing higher. A lot of of money is still on the sideline, and is likely waiting for new opportunities, and if stocks will keep pushing up, funds could shift from the dollar to stocks, potentially creating a blow-off top. This could mean that 2025 might be an “interesting” year for stocks, with potential for a major reversal. Grega
TVC:DXY
by ew-forecast
Yen VS Dollar; Trade with cautionGlobal financial markets are bracing for a possible Fed rate cut. Accordingly, forex markets have priced in the anticipated rate cut. September CPI data indicated US inflation is on course towards 2%; seems like the prevailing interest rates are working. Blackrock thinks the Fed will be cautious with a 25-bps rate cut as opposed to a 50-bps rate cut. There is also the remote possibility that the Fed will be cautious and maintain the rates. Ostensibly, it seems the markets have aggressively priced in a rate cut that has seen the dollar weaken against major currencies. Looking at cross Yen pairs, bearish momentum is dominant in Q3 OF 2024. However, we have seen price imbalance and price inefficiency across all Yen pairs that must be corrected. For this imbalance to be corrected, we require the US Dollar to rise. All factors held constant, retaining rates or cutting rates lesser than expected will spook the markets and we could see the dollar strengthen against the Yen and other major global currencies. Turning to the US Dollar index, we see a potential for further weakening before the index rises targeting 105 to 110 price levels.
by morrisgitau
DXY Potential Rally to 108: High-Probability Setup with FVG The DXY is currently positioned around 105, showing momentum to potentially push up to the 108 region. This area features a high-probability Fair Value Gap (FVG) on the daily and weekly timeframes, providing a strong confluence zone. Price previously failed to sustain on the monthly OB, indicating a move towards the buyside liquidity above this PD array. Should we see price react at the 108 FVG, it could present a reversal opportunity, especially given the alignment with overlapping daily and higher timeframe FVGs. However, if bullish momentum continues, this setup may also lead to further liquidity grabs. Always remember: DYOR (Do Your Own Research).
TVC:DXYLong
by INSIDER_INTEL