DXY
The U.S. economy exhibits strong growth with a 4.9% GDP increase and a healthy 3.9% unemployment rate, signaling economic vigor. However, persistent inflation at 3.7% has prompted the Federal Reserve to maintain a 5.5% interest rate, making the USD attractive for yield-seekers but also indicating potential overheating. Consumer confidence is moderate, and a substantial trade deficit of -$58.3 billion persists, suggesting caution. these indicators suggest a robust yet cautious market environment, necessitating a balanced trading approach.
The negative Non-Farm Payroll (NFP) data has catalyzed a significant bearish movement in the market, with a clear breakout from a consolidation area suggesting a continuation of this trend. The price is targeting key Fibonacci levels, with immediate sights set on 104.100 and a potential further decline to 103.370. Compounding this bearish outlook is the Federal Reserve's unexpected pause in interest rate hikes, which may weaken the dollar and reinforce the downward trajectory.
Targets: 104.100, 103.370
Overview of the DXY
VIX
Due to escalating political tensions, the VIX has surged towards the 'fear zone', signaling rising distrust among investors. However, there are indications that the index is stabilizing, returning to more normal levels. Despite this, I advise you to manage your risks carefully in your trades, as the market could experience increased volatility due to unexpected news.
I anticipated end of the seasonal decline in energy prices, along with a projected rise in the rates of goods and services, could signal an upcoming increase in the Consumer Price Index (CPI). This potential uptick in CPI would reflect the strengthening demand across various sectors, potentially influencing economic policy and market expectations.