Jump to content

USD Bull or Bear?


Recommended Posts

After such dramatic overnight price action it was always going to be a challenge to make sense of things in the cold light of day without a few hours or even days for things to settle down.  Still no harm in trying so here goes.


My previously posted long term analysis remains in play, which is encouraging given the volatility.  I had and still have 2 scenarios as follows:


  1. The market retraces to the previously broken Triangle line and then rebounds off to kick off a strong wave 3 rally, the rally many have been talking about for some time.
  2. The market breaks back down through that triangle line in a larger A-B-C form wave to make a lower low wave 4 (pink).

Last nights price action could be seen as exactly fitting scenario 1 but I would need to see a higher high than the 25 Oct high to be confident of this.  It has occurred at a 50% Fib with a very strong pin bar so the odds are good at face value.  However I am wondering where the key fundamentals impetus is unless Fed rate rise in Dec is driving it.


The alternative view is that the whole Trump move is an A-B preparatory for a strong wave C down to make the wave 4 retrace completion and then we get the rally (clearer on the 4 hour chart).  There are 2 possible Wave B turning points but a fresh higher high negates scenario 2.


Link to comment


This topic is now archived and is closed to further replies.

  • Posts

    • Sainsburys full year earnings and Unilever’s first quarter trading update both say the same thing, UK consumers are in for higher prices. The war in Ukraine, supply chain issues and the effects of ongoing Covid all to blame.      
    • US Dollar (DXY) Daily Price and Analysis US Q1 GDP may stall the greenback’s advance. A 20-year high nears for the US dollar. The multi-month US dollar rally continues with the greenback printing a fresh high today ahead of the first look at US Q1 GDP at 12.30 GMT. The US dollar basket (DXY) has been boosted by renewed weakness in the Euro and the Japanese Yen, as investors move from lower-yielding to higher-yielding currencies, while safe-haven flows continue to benefit the greenback. The US growth release later in the session is expected to show a sharp slowdown from the robust Q4 figure of 6.9%. The markets are currently pricing in growth of just 1% for the first three months of this year, with the slowdown mainly due to a reduction in inventory accrual over the quarter. This release is unlikely to move the greenback, unless there is a large miss or beat, as the Fed believe that 2022 US growth will be robust enough to let them tighten monetary policy sharply without damaging the economy. The latest US Core PCE data – the Fed’s preferred inflation reading – is released on Friday and this may have more effect on the US dollar than today’s GDP data. For all market moving economic data and events, see the DailyFX Calendar. The ongoing US dollar rally has been aided by weakness across a range of G7 currencies including the Euro, the Japanese Yen, and the British Pound. The Euro continues to battle with lowly growth expectations, exacerbated by energy concerns, the British Pound is mired by weak economic data, while the Japanese Yen is in freefall as the BoJ continues with its ultra-loose monetary policy.   The US dollar continues to press higher and looks set to break above 103.96, the March 2020 high. Above here the US dollar would be back at levels last seen nearly two decades ago. The March resistance will likely hold in the short-term, especially with month-end portfolio rebalancing at the end of the week, but US dollar strength is set to continue in the months ahead. USDOLLAR (DXY) WEEKLY PRICE CHART – APRIL 28, 2022 {{THE_FUNDAMENTALS_OF_BREAKOUT_TRADING}} What is your view on the US Dollar – bullish or bearish?   Apr 28, 2022 | DailyFX Nick Cawley, Strategist
    • While Tesla has nothing directly to do with Elon Musk buying Twitter - TSLA stock closed down 12% on news that Musk may have to sell stock and use other holdings to stand against the loan to finalise the purchase of the social media giant.        
  • Create New...