The money markets have shifted markedly in their expectations for next week's rate hike, laying down a 100% chance of a 75-point increase and a 34% chance of a 100-point rise at once. The previous day, we talked about less than 90% for 75 points and 0% for 100 points. However, an even bigger shock to expectations in July did not cause commensurate market turbulence.
In our view, yesterday's move was purely technical. The dollar bulls proved that they hold control of the market, protecting the #DXY from any severe test of the 50-day moving average. This was most telling in the #EURUSD, which reversed below this line with a decisive move.
Usually, such strong moves at key levels will break the resistance of the second side for a long time. In other words, we could now see more of a dollar march in the coming days and weeks with the potential for a renewal of the DXY global highs.
In our view, yesterday's move was purely technical. The dollar bulls proved that they hold control of the market, protecting the #DXY from any severe test of the 50-day moving average. This was most telling in the #EURUSD, which reversed below this line with a decisive move.
Usually, such strong moves at key levels will break the resistance of the second side for a long time. In other words, we could now see more of a dollar march in the coming days and weeks with the potential for a renewal of the DXY global highs.
The dollar's shallow correction may be over
After starting the week in retreat, the US dollar reversed sharply higher in the European session on Tuesday and is on the offensive on Wednesday. Dollar bulls have returned to active buying after a long but shallow correction from earlier this month's peak.
The Dollar Index (#DXY) peaked at 107 in early October after twelve weeks of gains. The market was then dominated by profit-taking. However, the pullback from the 107.1 peak was relatively shallow, and the DXY corrected 76.4% of the total upside amplitude, finding support at 105.2. Deeper corrections are seen as the norm, but there are truncated corrections in solid markets when there is sufficient reason to complete them.
After starting the week in retreat, the US dollar reversed sharply higher in the European session on Tuesday and is on the offensive on Wednesday. Dollar bulls have returned to active buying after a long but shallow correction from earlier this month's peak.
The Dollar Index (#DXY) peaked at 107 in early October after twelve weeks of gains. The market was then dominated by profit-taking. However, the pullback from the 107.1 peak was relatively shallow, and the DXY corrected 76.4% of the total upside amplitude, finding support at 105.2. Deeper corrections are seen as the norm, but there are truncated corrections in solid markets when there is sufficient reason to complete them.
📊🌐 Pro News Weekly Update 🌐📊
💵 The Dollar Index (#DXY) rose 1% and has been performing well against other currencies, but can it make up for the drop earlier this month?
🪙 #Gold retreated from $2000, in a corrective phase; but will it be able to stay above the 200-day moving average?
📉The Nasdaq rebounded and
🛢 #Oil had a pretty tough week, dipping below $80.
🪙 In crypto, #Bitcoin, #Ethereum, and #Solana surged.📈
🌐💼 Stay tuned for the latest market moves!
https://www.youtube.com/watch?v=iqFOop6o4bQ
💵 The Dollar Index (#DXY) rose 1% and has been performing well against other currencies, but can it make up for the drop earlier this month?
🪙 #Gold retreated from $2000, in a corrective phase; but will it be able to stay above the 200-day moving average?
📉The Nasdaq rebounded and
🛢 #Oil had a pretty tough week, dipping below $80.
🪙 In crypto, #Bitcoin, #Ethereum, and #Solana surged.📈
🌐💼 Stay tuned for the latest market moves!
https://www.youtube.com/watch?v=iqFOop6o4bQ
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Weekly Pro Analysis | Nasdaq Surges, Oil's Slide, and Crypto Rollercoaster
Welcome back to Pro News, where we break down the latest twists and turns in the financial markets. This week, we're tackling the highs and lows across the Nasdaq, diving into oil's slippery slope, and much more.
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#DXY
The American dollar is fighting hard for the trend. For the last three trading sessions, the dollar index has been crossing up and down the 200-day moving average every day. All in all, the flirting with this level has been going on for more than three weeks, during which neither bulls nor bears were able to form a stable trend.
Right now, there are about equal chances of a trend forming in one direction or the other, so it is worth watching closely to see which trend crystallises.
The dollar bumped around in October and declined sharply in November, with only some stabilisation late last month. The recent settlement, from this point of view, looks like an attempt to stand still and gather strength before a new downward impulse.
The first signal to switch to a bearish bias could be a sharp downward impulse under the 200-day average at 103.3 versus the current 103.6. The final confirmation will come in the form of an update of the November lows at 102.37.
The American dollar is fighting hard for the trend. For the last three trading sessions, the dollar index has been crossing up and down the 200-day moving average every day. All in all, the flirting with this level has been going on for more than three weeks, during which neither bulls nor bears were able to form a stable trend.
Right now, there are about equal chances of a trend forming in one direction or the other, so it is worth watching closely to see which trend crystallises.
The dollar bumped around in October and declined sharply in November, with only some stabilisation late last month. The recent settlement, from this point of view, looks like an attempt to stand still and gather strength before a new downward impulse.
The first signal to switch to a bearish bias could be a sharp downward impulse under the 200-day average at 103.3 versus the current 103.6. The final confirmation will come in the form of an update of the November lows at 102.37.
#DXY
The Dollar Index has found a balance around key technical levels in what looks like a consolidation before the start of a new medium-term trend. The DXY has been holding at its 200-day moving average for the past eight days, trading near the 103 level. Just over a month ago, the dollar consolidated at this level and ended in an intensified sell-off with a 2.9% drop.
The fact that the dollar was able to turn higher and retest previous levels suggests that there was significant support on the downside that kept the DXY below 100. Approaching this level has attracted buying interest over the past year.
During the last consolidation, the downward-sloping 50-day moving average changed its status from resistance to support.
Both of these factors are bullish for the dollar and point to further growth. Previous significant consolidations were at 113 and 106, which were pivotal levels in 2022 and 2023, respectively.
The Dollar Index has found a balance around key technical levels in what looks like a consolidation before the start of a new medium-term trend. The DXY has been holding at its 200-day moving average for the past eight days, trading near the 103 level. Just over a month ago, the dollar consolidated at this level and ended in an intensified sell-off with a 2.9% drop.
The fact that the dollar was able to turn higher and retest previous levels suggests that there was significant support on the downside that kept the DXY below 100. Approaching this level has attracted buying interest over the past year.
During the last consolidation, the downward-sloping 50-day moving average changed its status from resistance to support.
Both of these factors are bullish for the dollar and point to further growth. Previous significant consolidations were at 113 and 106, which were pivotal levels in 2022 and 2023, respectively.
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#DXY
The Dollar Index lost a third of a per cent on Wednesday and is once again attempting to break below its 200-day moving average (MA). Perhaps the formula "if it doesn't rise, it falls" can be applied to the dollar.
In early February, the dollar managed to consolidate above this line in a sharp move, but this did not put it on a growth path as one would expect. In November and December, signals that the next move would be a rate cut took almost 6% off the dollar. The dollar was only able to recover half of these losses as forecasts for the first cut were pushed back from March to June and from 6 to 3 cuts this year.
The dollar's modest performance suggests impressive selling pressure despite the positive fundamental backdrop. The dynamics of the Dollar Index suggest a change in sentiment since the second half of February, with the DXY falling every trading session in March.
The Dollar Index lost a third of a per cent on Wednesday and is once again attempting to break below its 200-day moving average (MA). Perhaps the formula "if it doesn't rise, it falls" can be applied to the dollar.
In early February, the dollar managed to consolidate above this line in a sharp move, but this did not put it on a growth path as one would expect. In November and December, signals that the next move would be a rate cut took almost 6% off the dollar. The dollar was only able to recover half of these losses as forecasts for the first cut were pushed back from March to June and from 6 to 3 cuts this year.
The dollar's modest performance suggests impressive selling pressure despite the positive fundamental backdrop. The dynamics of the Dollar Index suggest a change in sentiment since the second half of February, with the DXY falling every trading session in March.
#DXY #FOMC
Dollar Index: Some bullish bias before FOMC
The FOMC meeting is the main event of the day on Wall Street and can set the market mood for weeks to come, as the Fed often leads global monetary policy cycles.
No actual rate changes are expected today, and traders' attention will be focused on the FOMC's updated projections for interest rates, inflation, and the economy. Last time, in December, the Fed expected three rate cuts before the end of 2024. However, the market then priced in as many as five cuts.
Higher-than-expected inflation in recent months has led to a reassessment of expectations.
Dollar Index: Some bullish bias before FOMC
The FOMC meeting is the main event of the day on Wall Street and can set the market mood for weeks to come, as the Fed often leads global monetary policy cycles.
No actual rate changes are expected today, and traders' attention will be focused on the FOMC's updated projections for interest rates, inflation, and the economy. Last time, in December, the Fed expected three rate cuts before the end of 2024. However, the market then priced in as many as five cuts.
Higher-than-expected inflation in recent months has led to a reassessment of expectations.
Technically, #DXY signs of fatigue are rising near the October reversal area. On the daily timeframes, the RSI has entered the overbought territory. This was the case just before the start of the September 2022 and 2023 corrections, albeit noticeably below the price peak.
The overbought dollar accumulated from the gains since early March sets up a period of dollar consolidation from the current 106.0 to 104.5-105.0. This would be a classic correction, opening the way for a new wave of DXY growth to the 110 or even 115 area. But this will be a story with a different information narrative, as the current driver is exhausted.
A reversal after some fluctuations is possible, as was the case in October last year. The chances of such a scenario will increase if the global economy stays on the path of moderate growth, which will reduce the difference between the dynamics of the US economy and the rest of the developed world.
The overbought dollar accumulated from the gains since early March sets up a period of dollar consolidation from the current 106.0 to 104.5-105.0. This would be a classic correction, opening the way for a new wave of DXY growth to the 110 or even 115 area. But this will be a story with a different information narrative, as the current driver is exhausted.
A reversal after some fluctuations is possible, as was the case in October last year. The chances of such a scenario will increase if the global economy stays on the path of moderate growth, which will reduce the difference between the dynamics of the US economy and the rest of the developed world.
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The US dollar's gains stalled last week, and on Tuesday, it lost a third of a cent against a basket of major currencies to 105.4 from a peak of 106.3 the week before.
Yesterday's pullback more closely resembles the start of broader profit-taking than a reversal of the dollar's upward trend since early March.
The dollar was somewhat overheated after the 10-12 April spike. In addition, earlier this month, the #DXY entered the turning area of last October. As often happens, the ascent to the previous extremums is fast, but their overcoming indicates a change of the market regime, which happens only after a significant shakeout.
The formal reason for the weakening of the dollar on Tuesday was the positive dynamics of stock indices and the strengthening of the pound, with less certainty for a soon rate cut from BoE.
Yesterday's pullback more closely resembles the start of broader profit-taking than a reversal of the dollar's upward trend since early March.
The dollar was somewhat overheated after the 10-12 April spike. In addition, earlier this month, the #DXY entered the turning area of last October. As often happens, the ascent to the previous extremums is fast, but their overcoming indicates a change of the market regime, which happens only after a significant shakeout.
The formal reason for the weakening of the dollar on Tuesday was the positive dynamics of stock indices and the strengthening of the pound, with less certainty for a soon rate cut from BoE.
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The dollar fought back its uptrend
Friday's labour market data provided the dollar with a strong upward momentum. This bullish signal needs confirmation or refutation, and we are likely to get one or the other by the end of Wednesday.
The dollar index started June with a test of the 200-day moving average. It managed to push back from it after another batch of bullish US labour market data, which showed a 272k increase in employment and accelerated wage growth to 4.1% y/y.
#DXY, having opened the week with a gap up on the results of the European Parliament elections and the subsequent announcement of a snap election for the French National Assembly, is trading above its 50-day moving average.
The dollar's 1.3% rise since Friday has brought it back into the upward range that has existed since the last days of last year. The brief fall out of the range at the beginning of the month was false, as a failure to fall towards 104 (the previous local low) was met with buying rather than intensified selling.
Friday's labour market data provided the dollar with a strong upward momentum. This bullish signal needs confirmation or refutation, and we are likely to get one or the other by the end of Wednesday.
The dollar index started June with a test of the 200-day moving average. It managed to push back from it after another batch of bullish US labour market data, which showed a 272k increase in employment and accelerated wage growth to 4.1% y/y.
#DXY, having opened the week with a gap up on the results of the European Parliament elections and the subsequent announcement of a snap election for the French National Assembly, is trading above its 50-day moving average.
The dollar's 1.3% rise since Friday has brought it back into the upward range that has existed since the last days of last year. The brief fall out of the range at the beginning of the month was false, as a failure to fall towards 104 (the previous local low) was met with buying rather than intensified selling.
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Technically, the #DXY Dollar Index continues to hover near the lower boundary of the rising channel. The dollar needs to rise another 0.5% to confirm this upward trend, breaking the area of previous peaks. If the bulls are successful at this stage, the dollar will be able to grow to the upper boundary of the corridor (now at 109), which has the potential to strengthen by about 3% to the current levels.
A more hawkish tone of the central bank officials compared to Europe and more robust economic growth figures will help the USD on this growth path, promising less active easing of monetary policy conditions in the foreseeable future.
A continued bullish bias for the dollar threatens to push EURUSD back below 1.05 before the end of summer, where the pair briefly dipped in early October 2023.
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A more hawkish tone of the central bank officials compared to Europe and more robust economic growth figures will help the USD on this growth path, promising less active easing of monetary policy conditions in the foreseeable future.
A continued bullish bias for the dollar threatens to push EURUSD back below 1.05 before the end of summer, where the pair briefly dipped in early October 2023.
📣Trade responsibly with FxPro
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The #Nasdaq100 added about 1.5% after Powell's speech, closing above 20,000, from where it has sold off twice in the past two weeks. The S&P500 also had a record close.
Also showing a noteworthy reaction was the dollar (#DXY), which lost 0.5%. This small but important reversal emphasised the strength of resistance around the June highs and raised doubts as to whether the dollar will be able to stay within an upward channel.
We may get the final answer to this when we see the market reaction to Friday's employment report.
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Also showing a noteworthy reaction was the dollar (#DXY), which lost 0.5%. This small but important reversal emphasised the strength of resistance around the June highs and raised doubts as to whether the dollar will be able to stay within an upward channel.
We may get the final answer to this when we see the market reaction to Friday's employment report.
📣Trade responsibly with FxPro
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#Review #DXY
While Trump’s rise to power is widely seen as a positive for the dollar, the dollar index hit a one-month low on Monday as it continues to rebound from the Fed’s latest softening tone and inflation slowdown.
The impact of Trump’s policies on the dollar is largely based on the experience of his previous presidential term. As president, he imposed tariffs on imports and cut corporate taxes. Both elements are on his economic agenda again. Tariffs potentially reduce imports to curb trade deficits. Tax cuts encourage capital inflows.
However, both factors began to affect the dollar only after these policies kicked in. In addition, lawmakers effectively blocked these changes in the early months, making an early bet on the fundamental trend counterproductive.
Among the fundamentals, speculation around expectations for a Fed rate cut is now more influential. By the end of last week, markets were factoring in 3 consecutive cuts this year, starting in September, as the most likely scenario.
While Trump’s rise to power is widely seen as a positive for the dollar, the dollar index hit a one-month low on Monday as it continues to rebound from the Fed’s latest softening tone and inflation slowdown.
The impact of Trump’s policies on the dollar is largely based on the experience of his previous presidential term. As president, he imposed tariffs on imports and cut corporate taxes. Both elements are on his economic agenda again. Tariffs potentially reduce imports to curb trade deficits. Tax cuts encourage capital inflows.
However, both factors began to affect the dollar only after these policies kicked in. In addition, lawmakers effectively blocked these changes in the early months, making an early bet on the fundamental trend counterproductive.
Among the fundamentals, speculation around expectations for a Fed rate cut is now more influential. By the end of last week, markets were factoring in 3 consecutive cuts this year, starting in September, as the most likely scenario.
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#Review #DXY
Dollar Bears paused, breaking the uptrend
Last week, the dollar index regained some of its losses from the previous four weeks, but technically, it looks like short-term profit-taking by sellers before a new downward momentum.
The US dollar has been under pressure since late June as the Fed noted progress in reducing inflation. Money markets readily accepted this signal, giving a 94% probability of a rate cut in September versus 66% a month earlier and just 46% about two months ago. These changes are causing short-term bond yields to fall, reducing interest in the dollar.
Changes in expectations have taken about 2% away from the dollar over the past month. But on this downward path, the DXY has taken several technical levels, showing increasing signs of moving into a downward trend.
Dollar Bears paused, breaking the uptrend
Last week, the dollar index regained some of its losses from the previous four weeks, but technically, it looks like short-term profit-taking by sellers before a new downward momentum.
The US dollar has been under pressure since late June as the Fed noted progress in reducing inflation. Money markets readily accepted this signal, giving a 94% probability of a rate cut in September versus 66% a month earlier and just 46% about two months ago. These changes are causing short-term bond yields to fall, reducing interest in the dollar.
Changes in expectations have taken about 2% away from the dollar over the past month. But on this downward path, the DXY has taken several technical levels, showing increasing signs of moving into a downward trend.
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#EconomicReview #DXY
▫️ US Retail Sales +1% m/m vs expected 0.4%;
▫️ Weekly jobless claims fall for the second week, erasing earlier gains;
▫️ Dollar rises on a reassessment of interest rate expectations, and stocks rise on reduced risk of economic recession.
Read more
▫️ US Retail Sales +1% m/m vs expected 0.4%;
▫️ Weekly jobless claims fall for the second week, erasing earlier gains;
▫️ Dollar rises on a reassessment of interest rate expectations, and stocks rise on reduced risk of economic recession.
Read more
FxPro News
Forex - Dollar and risk appetite rise on upbeat data | Market Overview
Weak macro data in early August triggered a simultaneous sell-off in equities and the dollar on fears of an economic meltdown. Over the past ten days...
#MarketReview
▫️ The dollar has lost around 4% since the beginning of July and more than 2.3% since its peak in August;
▫️ Pressure comes from expectations of more aggressive Fed rate cuts;
▫️ #DXY has pulled back to key trading range support of the past 20 months;
▫️ Powell's speech has the potential to both turn #USD higher and confirm a path to the downside.
Read more
▫️ The dollar has lost around 4% since the beginning of July and more than 2.3% since its peak in August;
▫️ Pressure comes from expectations of more aggressive Fed rate cuts;
▫️ #DXY has pulled back to key trading range support of the past 20 months;
▫️ Powell's speech has the potential to both turn #USD higher and confirm a path to the downside.
Read more
FxPro News
Forex - Dollar on the edge | Market Overview
The US dollar has fallen to its lowest levels of the year, losing more than 2.3% from its August peak and around 4% since early July as expectations ...