DXY Now Gets Bid As The Market Flips Hawkish
The DXY is elevated today, though in the recent hour it is fading some gains. I have been gone a full week and before I left oil was getting elevated and yields were at key levels. I come back and oil is in the 100s, and the 10-year is just shy of 5%.
So the market is now pricing a hawkish rate hike versus the dovish path it leaned toward before. DXY is trading in a range. I have the levels marked in orange, resistance at 99.80 and support at 98.60. Tight, but that's likely the range going into FOMC.
A breakout is contingent on a few things.
Higher: a hawkish hike, oil higher, yields staying elevated, and Fed guidance signaling more hikes as inflation risk returns.
Lower: a dovish hike, oil retreating below $100, yields following down, and the Fed signaling it will wait this out.
A hike this week is almost certain near 90%.
read the full article here.
— Alan
The DXY is elevated today, though in the recent hour it is fading some gains. I have been gone a full week and before I left oil was getting elevated and yields were at key levels. I come back and oil is in the 100s, and the 10-year is just shy of 5%.
So the market is now pricing a hawkish rate hike versus the dovish path it leaned toward before. DXY is trading in a range. I have the levels marked in orange, resistance at 99.80 and support at 98.60. Tight, but that's likely the range going into FOMC.
A breakout is contingent on a few things.
Higher: a hawkish hike, oil higher, yields staying elevated, and Fed guidance signaling more hikes as inflation risk returns.
Lower: a dovish hike, oil retreating below $100, yields following down, and the Fed signaling it will wait this out.
A hike this week is almost certain near 90%.
read the full article here.
— Alan
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EURUSD Daily Chart
EUR/USD's upward trend is still technically in tact after tapping into the 50% fib and catching support. For bulls, the last level of support would be at the 61.8% fib.
Personally, I believe you can see Euro continue to trend higher if you continue to see oil and yields retreat from their relative highs.
Remember:
The Fed does NOT want to pivot into a hiking cycle. Though it seems they are at the mercy of yields and oil. If for some reason you see oil and yields retreat then you may get an "Insurance Hike," and the market takes that well.
An Insurance Hike would be a one-time hike, with the intent of holding rates until the path lower is clear. In that case, Dollar loses strength as the one-time hike is already priced in.
I'm looking to buy if I get the green light. As of now, EF is Bearish on this pair.
If you want updates / alerts of new trades being taken, join our VIP group here! Today is the last day for 40% off.
— Alan
EUR/USD's upward trend is still technically in tact after tapping into the 50% fib and catching support. For bulls, the last level of support would be at the 61.8% fib.
Personally, I believe you can see Euro continue to trend higher if you continue to see oil and yields retreat from their relative highs.
Remember:
The Fed does NOT want to pivot into a hiking cycle. Though it seems they are at the mercy of yields and oil. If for some reason you see oil and yields retreat then you may get an "Insurance Hike," and the market takes that well.
An Insurance Hike would be a one-time hike, with the intent of holding rates until the path lower is clear. In that case, Dollar loses strength as the one-time hike is already priced in.
I'm looking to buy if I get the green light. As of now, EF is Bearish on this pair.
If you want updates / alerts of new trades being taken, join our VIP group here! Today is the last day for 40% off.
— Alan
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Build stronger market conviction with these core tools:
📈 Automated fundamental scoring for currencies, indices, and commodities
📈 Institutional positioning tracking via clean COT report visualizations
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🔔 Closing Bell - Question of the Day
Using a stop loss guarantees you will never lose more than your intended risk on a trade.
Using a stop loss guarantees you will never lose more than your intended risk on a trade.
Anonymous Quiz
61%
True
39%
False
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Crude Oil Now Breaks Out as a Second Supply Route Goes Down
Crude continues to advance, up 4.84% today, and things are not cooling down. Strikes suspended the infrastructure allocating roughly 7 million barrels per day of Saudi oil to the Red Sea. That was the alternative route around the Strait of Hormuz, and it is now halted. That is about 4% of global supply.
So take the roughly 20% of supply disrupted by Hormuz, add another 4%, and you have around 24% of the world's supply halted or disrupted in that region. That keeps oil bid, and it makes tomorrow harder.
If the Fed wants a one-time insurance hike and then to lower rates, these oil prices do not help them stay on that path. If oil keeps climbing and the geopolitics escalate, the Fed could get forced into a hiking cycle.
The FedWatch tool has shifted hawkish, now leaning toward two to four hikes by December 2027, when the market was priced for one. That is a completely different story.
read the full article here.
— Alan
Crude continues to advance, up 4.84% today, and things are not cooling down. Strikes suspended the infrastructure allocating roughly 7 million barrels per day of Saudi oil to the Red Sea. That was the alternative route around the Strait of Hormuz, and it is now halted. That is about 4% of global supply.
So take the roughly 20% of supply disrupted by Hormuz, add another 4%, and you have around 24% of the world's supply halted or disrupted in that region. That keeps oil bid, and it makes tomorrow harder.
If the Fed wants a one-time insurance hike and then to lower rates, these oil prices do not help them stay on that path. If oil keeps climbing and the geopolitics escalate, the Fed could get forced into a hiking cycle.
The FedWatch tool has shifted hawkish, now leaning toward two to four hikes by December 2027, when the market was priced for one. That is a completely different story.
read the full article here.
— Alan
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Oil Daily Chart
Am I crazy for wanting to short this chart??
Piggybacking off of the chart markup above, oil definitely disrupts the Fed's preferred rate path. We know that already.
However, let's look past the obvious and discuss what could happen if oil hits that $117 recent high.
Taking a holistic view on the situation, I believe it is of best interest for both parties to end the war. On one side (Iran), you have serious economic bleeding and domestic instability. On the other (U.S.) you have mid-term elections, inflation risks, potential rate hike cycle, and the worries of what a higher rate environment could do to the AI trade and broader market.
Not to mention, the rest of the world is hurting (just look at global yields)
$117 was pricing the worst case scenario. We'd need something worse to take us past that. I personally don't think that's in the best interest of anybody.
I still need to build a trade around this idea. If price reaches $117, I'll share the position in the VIP discord.
— Alan
Am I crazy for wanting to short this chart??
Piggybacking off of the chart markup above, oil definitely disrupts the Fed's preferred rate path. We know that already.
However, let's look past the obvious and discuss what could happen if oil hits that $117 recent high.
Taking a holistic view on the situation, I believe it is of best interest for both parties to end the war. On one side (Iran), you have serious economic bleeding and domestic instability. On the other (U.S.) you have mid-term elections, inflation risks, potential rate hike cycle, and the worries of what a higher rate environment could do to the AI trade and broader market.
Not to mention, the rest of the world is hurting (just look at global yields)
$117 was pricing the worst case scenario. We'd need something worse to take us past that. I personally don't think that's in the best interest of anybody.
I still need to build a trade around this idea. If price reaches $117, I'll share the position in the VIP discord.
— Alan
👍22❤6
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❤16
🔔 Closing Bell - Question of the Day
A trader with a 40% win rate can still be profitable if average winners are meaningfully larger than average losers.
A trader with a 40% win rate can still be profitable if average winners are meaningfully larger than average losers.
Anonymous Quiz
94%
True — profitability depends on win rate combined with reward-to-risk, not win rate alone
6%
False — a win rate below 50% guarantees a losing strategy over a large enough sample size
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Fed day gameplan:
- Personally, I think the fed is unlikely to conduct a hawkish hike. (A hike in which the dot plot also guides for more hikes than feared currently by the market.
- I am thinking a dovish hike is likely. This would be a scenario in which they do hike to maintain credibility within the bond market (which is suggesting a hike is necessary), while also limiting future rate hike expectations.
- The reason for this? Jobs data & economic growth metrics have been healthy, but showing some mixed signals recently. Meanwhile inflation is up - but largely due to oil prices (which the fed cannot control with their monetary policy tools).
My current trades:
- Reserved for VIP members. All new trades for today have just been shared here
- Join the action! If you have questions about the VIP group, please message here
- Nick
- Personally, I think the fed is unlikely to conduct a hawkish hike. (A hike in which the dot plot also guides for more hikes than feared currently by the market.
- I am thinking a dovish hike is likely. This would be a scenario in which they do hike to maintain credibility within the bond market (which is suggesting a hike is necessary), while also limiting future rate hike expectations.
- The reason for this? Jobs data & economic growth metrics have been healthy, but showing some mixed signals recently. Meanwhile inflation is up - but largely due to oil prices (which the fed cannot control with their monetary policy tools).
My current trades:
- Reserved for VIP members. All new trades for today have just been shared here
- Join the action! If you have questions about the VIP group, please message here
- Nick
❤29👍20🔥5
Fed hikes rates for the first increase since 2023, quarter point to a 3.75-4.00% range, 12-0. No dissents at all, which is itself hawkish. A month ago the debate was hike-versus-hold; today the whole committee agreed to move.
The dots project more.
The median end-2026 view is 3.8%, and 16 officials see at least one more hike this year.
The dots step up through 2027, with the near-term clusters sitting around 3.875% (next year) and 4.125% (next 2-3 years) per the median forecasts. Meaning, rates will stay pretty dang close to where we are now.
We'll see if Warsh commits to the hawkish narrative or walks some of it back.
The dots project more.
The median end-2026 view is 3.8%, and 16 officials see at least one more hike this year.
The dots step up through 2027, with the near-term clusters sitting around 3.875% (next year) and 4.125% (next 2-3 years) per the median forecasts. Meaning, rates will stay pretty dang close to where we are now.
We'll see if Warsh commits to the hawkish narrative or walks some of it back.
👍20❤13🫡4
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S&P 500 Now Breaks Support After a Hawkish Fed Hike
Here is the problem for equities. The market effectively priced one hike. The other two or three, not so much. So for the days and weeks ahead, we could see a continuation of that repricing, and that is not good for stocks. You already have warnings on the equity side with yields where they are.
The S&P is losing the 7,560 to 7,635 support right now, sitting at 7,543. The next support is around 7,320, roughly 3% away. Below that, the 7,200 to 7,290 demand zone.
Bigger picture: the administration has lost the bond market with yields near 5%. The stock market is the last thing on their scorecard it has left. If yields and oil stay elevated, that pressures the very thing it is leaning on.
read the full article here.
— Alan
Here is the problem for equities. The market effectively priced one hike. The other two or three, not so much. So for the days and weeks ahead, we could see a continuation of that repricing, and that is not good for stocks. You already have warnings on the equity side with yields where they are.
The S&P is losing the 7,560 to 7,635 support right now, sitting at 7,543. The next support is around 7,320, roughly 3% away. Below that, the 7,200 to 7,290 demand zone.
Bigger picture: the administration has lost the bond market with yields near 5%. The stock market is the last thing on their scorecard it has left. If yields and oil stay elevated, that pressures the very thing it is leaning on.
read the full article here.
— Alan
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USD/JPY Daily Chart
With FOMC behind us and more clarity on where the Fed sits, I'm looking to start executing some trades on USD/JPY.
My last puzzle piece is BoJ later this week.
I generally think the carry trade lives on, or even gets better depending on if the 2-3 rate hikes actually develop.
If you want updates / alerts of new trades being taken, join our VIP group here! Today is the last day for 40% off.
— Alan
With FOMC behind us and more clarity on where the Fed sits, I'm looking to start executing some trades on USD/JPY.
My last puzzle piece is BoJ later this week.
I generally think the carry trade lives on, or even gets better depending on if the 2-3 rate hikes actually develop.
If you want updates / alerts of new trades being taken, join our VIP group here! Today is the last day for 40% off.
— Alan
❤17👍7🔥3
🔔 Closing Bell - Question of the Day
A strengthening dollar is always bearish for US stocks.
A strengthening dollar is always bearish for US stocks.
Anonymous Quiz
38%
True
62%
False
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Gold Rallied After a Rate Hike, Because the Market Doesn't Believe the Next Ones Will Come
Gold is up 2.42% today, the day after the Fed hiked. Higher rates are usually worse for gold, so what is happening?
The Fed hiked yesterday and floated two to three more hikes ahead. But gold is not up because of those hikes. It is up because those hikes may not come. They are entirely contingent on oil, yields, and inflation expectations. And today, oil is trending lower for a second red day, with yields easing on both the short and long end. That says the extra hikes may not make it into the picture, and that is good for gold.
Technically, yesterday it traded down into the 0.618 retracement at 4,241, which lined up with previous resistance turned support, and held. It is rallying off that now. Clear the 0.382 at 4,415 and the 200-day, and the upside really shines.
I am on the sidelines looking for a pullback entry.
read the full article here.
— Alan
Gold is up 2.42% today, the day after the Fed hiked. Higher rates are usually worse for gold, so what is happening?
The Fed hiked yesterday and floated two to three more hikes ahead. But gold is not up because of those hikes. It is up because those hikes may not come. They are entirely contingent on oil, yields, and inflation expectations. And today, oil is trending lower for a second red day, with yields easing on both the short and long end. That says the extra hikes may not make it into the picture, and that is good for gold.
Technically, yesterday it traded down into the 0.618 retracement at 4,241, which lined up with previous resistance turned support, and held. It is rallying off that now. Clear the 0.382 at 4,415 and the 200-day, and the upside really shines.
I am on the sidelines looking for a pullback entry.
read the full article here.
— Alan
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EURUSD Daily Chart
Although I'm directionally bearish on USD, I do think it's possible to see some short-term dollar strength. In that case, I'd sell USD on premium prices.
In that case, EUR/USD looks like a pretty good short for the meantime. I like how it broke all layers of defense for the bulls, officially breaching the 61.8% fib retracement level.
EdgeFinder is also showing a bearish reading of -10, which I love to see. Waiting for a specific technical confirmation to give me the greenlight. But I'm intrigued.
If you want updates / alerts of new trades being taken, join our VIP group here! Today is the last day for 40% off.
— Alan
Although I'm directionally bearish on USD, I do think it's possible to see some short-term dollar strength. In that case, I'd sell USD on premium prices.
In that case, EUR/USD looks like a pretty good short for the meantime. I like how it broke all layers of defense for the bulls, officially breaching the 61.8% fib retracement level.
EdgeFinder is also showing a bearish reading of -10, which I love to see. Waiting for a specific technical confirmation to give me the greenlight. But I'm intrigued.
If you want updates / alerts of new trades being taken, join our VIP group here! Today is the last day for 40% off.
— Alan
👍16❤10🔥2
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❤16🔥8
🔔Closing Bell - Question of the Day
An inverse head and shoulders completes with a neckline break. Where do traders commonly project the initial target?
An inverse head and shoulders completes with a neckline break. Where do traders commonly project the initial target?
Anonymous Quiz
29%
The prior swing high before the pattern began forming
9%
Double the height of the right shoulder
50%
The distance from the head to the neckline, added above the breakout point
12%
There's no standard projection — targets are set on volume alone
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The BOJ Hiked and the Yen Fell Anyway, Because the Fed MIGHT Outpace Japan
USDJPY is up 1.23% today at 157.88, yet the Bank of Japan raised rates 25bp last night to 1.25% and said it is willing to hike more if conditions warrant. So why is USDJPY higher?
I think the market is making a bet. Yes, the BOJ hiked, but so did the Fed, and the Fed's hike was already priced. The extra was that the Fed came out more hawkish than expected. With that comes the bet that the Fed outpaces Japan on hikes. If that is the case, the carry trade does not just live on, it gets better in favor of USDJPY higher. The rate gap widening is why the pair is up.
The hike also carried two dissents, which told the market the BOJ is less united on further tightening than thought.
Technically, price is tapping a bearish trendline plus the 200-day, two layers of resistance. Hold there and I see a reject toward 156. Break higher and 159, 160 are next.
read the full article here.
— Alan
USDJPY is up 1.23% today at 157.88, yet the Bank of Japan raised rates 25bp last night to 1.25% and said it is willing to hike more if conditions warrant. So why is USDJPY higher?
I think the market is making a bet. Yes, the BOJ hiked, but so did the Fed, and the Fed's hike was already priced. The extra was that the Fed came out more hawkish than expected. With that comes the bet that the Fed outpaces Japan on hikes. If that is the case, the carry trade does not just live on, it gets better in favor of USDJPY higher. The rate gap widening is why the pair is up.
The hike also carried two dissents, which told the market the BOJ is less united on further tightening than thought.
Technically, price is tapping a bearish trendline plus the 200-day, two layers of resistance. Hold there and I see a reject toward 156. Break higher and 159, 160 are next.
read the full article here.
— Alan
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