Another 48h - I'm Confident About The DXY

2024/10/29
Another 48h - I'm Confident About The DXY
“the dxy is likely to leave the w formation bullish!
but how far down does it go? even before the outbreak?”


While the JOLTs job openings came out weaker than expected today, the US housing market appears to be, more or less, back to average levels before the historic breakout and/or down. Like the Redbook, which has remained stable at around 4% for a year. Also after historical ups and downs, before and after the coronavirus outbreak. The DXY traded at 104.282 points least - another flat day with -0.02%. Don`t ignorte tomorrow, on Wednesday: GDP Annual Growth Rate. On Thursday: PCE Price Index YoY. And on Friday: US unemployment rate. Therefore, there is still enough new and economic information to learn something new - to have what we already knew confirmed. By analyzing and evaluating their impact on the price action of the DXY .

The financial markets seem to be pricing in an election success for Donald J. Trump: GC1! is rising again to a new all-time high, BTC1! is rising, and/or after TSLA also reported good quarterly figures, the company of Musk too. While his DJT have also risen since the end of September 2024, since Harris made an incompetent, uncertain TV appearance on the other hand, it's almost quadrupled so far. No question! This is no guarantee of Trump success - and I still expect the Democrats to win (until the election results are known). Although I'm increasingly getting the feeling that Harris needs a speech therapist - and Trump needs a visit to diplomatic school. But this is America 2024. And the US election campaign is full of euphoria - on both sides. By the way: "I love it!"

Be that as it may, regardless of the expectations of the presidential election next week, capital market interest rates rose again today. What all the conclusions are: when "The Donald" is back at the helm, the deficits will shoot up again, while the US economy, after the green fiscal policy of Biden (and Harris), seems to be growing out of the US stagflation. And we can currently assume a US SoftLanding scenario - without a recession - in the USA. And I do that too! Which is why I'm more long on the US dollar. Because interest rates could remain higher for longer than traders and investors in Chicago are currently expecting.

Anyway, in the past calendar week, investors and traders handled the DXY above our w formation for the first time again (during Wednesday's trading session as when Wall Street was open). Only within a few hours? But at least! Our learning-educated headline was: "One swallow doesn't make a summer!" And so during the following Thursday we had a very strong bearish selling day. In order to regain almost half of Thursday's loss on Friday. I don't want to scare you - but greed is back in the DXY . Which is proven by the fact that in the last 20 trading days, after the low, only 3 trading days ended in bearish red. The DXY has risen in 17 out of 20 trading days since the annual rise on Friday, September 27, 2024 - until last weekend.

104.447 points - (2024/08/01) - High W-Formation
104.317 points - (2024/10/25) - last price action
103.820 points - (2017/01/03) - Historical Mid Term High
103.104 points - (2024/10/10) - High While Last Inflation Data
These are the most important price actions for this calendar week!
This week we have two red dojis in the DXY . And that more or less round about the highs of even our w trend reversal formation. Traders and investors seem to be wondering whether the fundamental US economic data is strong enough to trade and/or invest the DXY above our w trend reversal formation from now on. The bulls also tried to drive the DXY higher today, but it didn't work today either - and this is now for the third time (Wednesday, Saturday, and today).

“To be in the game, you have to endure the pain.”
George Soros

• Will We Handle (104.477 points) A Bullish Breakout?
  
• Does The 2017 High (103.820 points) Serve As Support?
  
• Does The 2017 High (103.820 points) Serve As Resistance?
  
• Will DXY Fall Back (103.104 points) based on the US economic data?
  

These 4 questions need to be answered - during this calendar week.
So that we can learn something new with the help of price action; so that we remember that we already knew something old and now know it confirmed. Because a breakout price action above 104.477 points should confirm the medium-term trend reversal formation, i.e. w formation. While a fall below 103.104 points could possibly make the bear's mouth water again due to disappointing and/or negative US economic data. This is the educational learning stuff for this calendar week!

If we assume that Wall Street decides that Trump will win and Harris will lose, we are likely to see turbulence in price action next week! A bloodbath for BTC1! , TSLA (company owned by Trump's political friend Musk), and/or his DJT . A friend of mine, an online broker Analyst, told me today, "that the financial markets have now decided in favor of a victory for Donald Trump and have therefore priced in a strong dollar and rising capital market interest rates!" Which I don't contradict. But I think that DXY is not rising because of Donald Trump and his upcoming US fiscal policy. More likely the weakness of the yen and/or also the EUR. No - rather, I'm in the US soft-landing camp, with no current US recession looming - and that's why I am generally long for the DXY and WallStreet because the US economy seems to be growing out of the US stagflation. And that's why US interest rates are not going down as quickly as originally expected after the recent interest rate cut of 50 basis points. But of course, I don't deny that BTC1! is also rising because there are many Trump fans. But on the other hand, this also means that if "The Donald" doesn't win the election, the now very clear positioning on the financial markets would be in trouble: the stock markets could fall (especially some segments such as small caps, energy, etc. ), BTC1! could fall, GC1! could fall - and the DXY could also fall, as could capital market interest rates. Is that coming? I do not know! But I agree with my colleague in the conclusion that we came together again that, from today's perspective, a Harris victory should be a real (and negative) surprise for Wall Street. And the price action should move the entire asset classes.

However, today's trading day in the DXY was again a so-called failed bullish false breakout attempt, from our w trend reversal formation, since the beginning of August 2024. 104,570 points from Wednesday last week - 104,573 points from Sunday - and or also 104,636 points from today - were the highest prices white the last trading sessions. As always just above the high of 104,447 points of our w trend reversal formation. So we seem to have drawn the line well when it comes to our technical analysis. And therefore, also due to the impending fundamental US economic data, we should first wait and see how the week progresses. But I'm becoming more confident day by day - which beats the DXY to formulate a long DXY 4XSetUp. But let's remain methodologically pragmatically practical - and continue to learn, as we have hopefully done so far. And first wait for the figures for US economic growth tomorrow.

For this week, I have also included 2 technical indicators, also due to the numerous US economic data. In order to be able to measure the responsive price action on both the price axis (using the roc) and the time axis (using the aroon). So we can understand, this is a demanding task that doesn't work every day, let alone always. But looking back, at least to date, we have received good indications twice. First of all, a sales estimate, as shown in the chart. And/Or also a purchase indication - which even holds up to this day. Therefore, pay attention to the US economic data this calendar week - and much more on the reaction of the market, the majority of traders and investors on the DXY .


With best wishes
and with good intentions!
Aaron



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