DXY IS ABOUT TO CRASH, HERE'S WHY
Taking a look at the monthly chart of the DXY, several signals are flashing Bearish divergence on the 1 month chart
Let's start by taking a look at the upper range of the DXY marked by the RED arrows:
- We can see that price moved up between November 2015 and October 2022 tremendously, * WHILE * The 1 month MACD closed at a LOWER HIGH on October 3rd of 2022
- When price moves UP^, while the MACD forms a Lower High, this is an extremely strong sign of BEARISH divergence
- Since this signal has been playing out over almost the past 8 years. The downtrend is going to be extremely strong when it comes
Now onto the Lower Range of the DXY marked by the YELLOW arrows:
- DXY closed at a lower high, while the MACD made a lower low on May 3rd of 2021
- The MACD did NOT CLOSE at a lower high compared to April 2018's level
So clearly we can see Bearish Divergence playing out when looking at BOTH the upper range of price action and the lower range of price action
Now I want to talk about the current state of the economy in 2023:
CPI, PCE, and PPI came in slightly hotter than expected. The Bears of Wall Street and the ENTIRE STOCK MARKET, were ALL expecting the markets to CRASH in the past week, and this has not played out at all
The DXY did not go as high as most expected, which is shocking to all the bears
The DXY is now about to form a death cross on the monthly MACD, and an 8 YEAR BEARISH DIVERGENCE CYCLE HAS BEEN RIGHT IN FRONT OF US THIS WHOLE TIME
Now, HERE'S HOW I EXPECT things to play out in the coming quarters:
If CPI PPI & PCE beat expectations to the downside in March and come in lower than expected...
The DXY will fall rapidly below 97, and as a result, you will see the largest stock market rally of the entire 21st-century... (So Far)
Bitcoin, Ethereum, Dogecoin, Shiba Inu, Tesla, Meta, Microsoft, Nvidia, Google, Shopify... every single one of these stocks & cryptocurrencies, will EXPLODE in value & go on VIOLENT multi month rallies unlike anything you've ever seen before
If CPI PPI & PCE beat expectations to the UPSIDE in March and come in higher than expected...
The Fed will have to toughen its stance on monetary policy and perhaps consider 50 and 75 basis point hikes respectively to reach a terminal fed funds rate of 6%.
This will shock the markets to the downside and cause a pullback while the DXY possibly reaches a double top around the 115 region BEFORE collapsing
Once the DXY reaches its double top, markets will realize that the Fed has essentially started a deflationary cycle that could damage the economy & make my Bearish price target on the DXY look minuscule in comparison
As always, thank you for reading. Remember to take this with a grain of salt, and let's get it!
Let's start by taking a look at the upper range of the DXY marked by the RED arrows:
- We can see that price moved up between November 2015 and October 2022 tremendously, * WHILE * The 1 month MACD closed at a LOWER HIGH on October 3rd of 2022
- When price moves UP^, while the MACD forms a Lower High, this is an extremely strong sign of BEARISH divergence
- Since this signal has been playing out over almost the past 8 years. The downtrend is going to be extremely strong when it comes
Now onto the Lower Range of the DXY marked by the YELLOW arrows:
- DXY closed at a lower high, while the MACD made a lower low on May 3rd of 2021
- The MACD did NOT CLOSE at a lower high compared to April 2018's level
So clearly we can see Bearish Divergence playing out when looking at BOTH the upper range of price action and the lower range of price action
Now I want to talk about the current state of the economy in 2023:
CPI, PCE, and PPI came in slightly hotter than expected. The Bears of Wall Street and the ENTIRE STOCK MARKET, were ALL expecting the markets to CRASH in the past week, and this has not played out at all
The DXY did not go as high as most expected, which is shocking to all the bears
The DXY is now about to form a death cross on the monthly MACD, and an 8 YEAR BEARISH DIVERGENCE CYCLE HAS BEEN RIGHT IN FRONT OF US THIS WHOLE TIME
Now, HERE'S HOW I EXPECT things to play out in the coming quarters:
If CPI PPI & PCE beat expectations to the downside in March and come in lower than expected...
The DXY will fall rapidly below 97, and as a result, you will see the largest stock market rally of the entire 21st-century... (So Far)
Bitcoin, Ethereum, Dogecoin, Shiba Inu, Tesla, Meta, Microsoft, Nvidia, Google, Shopify... every single one of these stocks & cryptocurrencies, will EXPLODE in value & go on VIOLENT multi month rallies unlike anything you've ever seen before
If CPI PPI & PCE beat expectations to the UPSIDE in March and come in higher than expected...
The Fed will have to toughen its stance on monetary policy and perhaps consider 50 and 75 basis point hikes respectively to reach a terminal fed funds rate of 6%.
This will shock the markets to the downside and cause a pullback while the DXY possibly reaches a double top around the 115 region BEFORE collapsing
Once the DXY reaches its double top, markets will realize that the Fed has essentially started a deflationary cycle that could damage the economy & make my Bearish price target on the DXY look minuscule in comparison
As always, thank you for reading. Remember to take this with a grain of salt, and let's get it!
Disclaimer
The information and publications are not meant to be, and do not constitute, financial, investment, trading, or other types of advice or recommendations supplied or endorsed by TradingView. Read more in the Terms of Use.