2025/01/07
Another 48h - DXY Back On Its Feet Today With +0.2%
“yesterday's losses haven't gone further down today!
will price action be able to hold? today? morning?”
European stocks largely continued to rise today, Tuesday, January 7, 2024. Increased inflation in the euro area in December 2024 did not dissuade investors from expectations of further gradual interest rate cuts by the European Central Bank. The local stock markets in Europe did better on Tuesday than the US stock exchanges, some of which slipped into the red. The
STOXX50 managed to pass the 5,000 point mark for the first time since mid-October 2024 and brought an increase of 0.50 percent to 5,011.82 points across the finish line. Outside the euro area, however, developments were mixed. While the British 
UKX fell by -0.05% to 8,245.28 points, while the Swiss leading index 
SMI rose by +1.19% to 11,830.77 points. However, our German 
DAX continued the strong start to the week today. Its record high of just over 20,500 points from mid-December 2024 is now within reach again. Our leading German index DAX ultimately closed with an increase of +0.62% to 20,340.57 points. This means that it has clearly moved up from the 21-day line. In early trading it briefly slipped below this moving line, which signals the short-term trend.And all this while inflation in our Eurozone is rising again - while the ECB has started to lower interest rates! As the inflation data published today by Eurostat shows, price pressure in the Eurozone is increasing for the third time in a row. Inflation in the euro area not only increased in December 2024 but even accelerated, calling into question the ECB's cautious interest rate cuts? Even if no one is talking about it today! The annual inflation rate in the Euro Area accelerated for a third straight month to 2.4% in December 2024, the highest rate since July, compared to 2.2% in November and in line with expectations, preliminary estimates showed. After we had in September the low by 1.7%. Anyway, the stock markets have largely risen today. Not that we misunderstand each other: “I don't want to make any fundamental criticism of the ECB at this point! But at this point I will not and/or cannot ignore the danger that interest rates will trigger a coming inflation bubble due to interest rate cuts that are too early and too deep - although I would prefer it otherwise!" Nevertheless, regardless of my opinion, the monetary authorities will probably continue their gradual steps Maintain the approach to lowering interest rates despite the ongoing price pressure - so that the current bullish mood towards European stocks is likely to continue, just as it has in the USA also!?
“Although we cannot rid ourselves of misconceptions, we can correct them when we become aware of them.”
George Soros
- Will there be a bullish breakout above the 2024 high?
- Or a bearish fall back below the annual high in 2023?
The answer to one of the two questions is important - one way or another - because we will either see a confirmation of the current upward trend in price action in the
DXY ? And/Or a significant break in the current upward trend? If I am not mistaken, the current upward trend is driven by two main influencing factors: firstly, because it has been intact since the annual low in 2024 (technical analysis). And on the other hand, because the trend ran before, during, and/or even after the US presidential election (political scenario), namely Trump's re-election.109.533 : 2024/12/20 - Annual Year High 2024
108.443 : 2025/01/07 - last price action
107.348 : 2023/10/03 - Annual Year High 2023
It is how it is - if i am not wrong!? “If you will, we are currently experiencing the calm before the storm! Which storm? As I tried to formulate in the two questions, this is our learning material for this week - before Donald Trump officially has the last word in the White House again on January 20, 2025. And with a majority like hardly any US president before him, if I'm not mistaken.”, as I wrote yesterday. After yesterday's bearish loss of over -0.5%, the price action in the
DXY is more or less recovering flat today - but tends to be bullish again. It is now important that the price action does not fall below 108.300 points again! Why? Because that would confirm the last small sideways trend that had developed in the last two weeks of 2024. Namely as a bullish price action zone. What can be assumed today - and in the coming days we will be heading towards annual highs in 2024. Instead of heading towards annual highs in 2023.With best wishes and good intentions:
Aaron
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