2024/12/09
Another 48h - DXY On Intraday High When Trump Was Re-Elected
“this week us inflation data and/or cpi data will lead the way!
has trump euphoria gone?Interest rate reduction fantasies?”
What a past week?
What kind of weekend?
What a way to start the week?
The
DXY has been under slight pressure for 2 weeks after climbing from the 2024 annual low to the 2024 annual high before Trump's election! And in Syria, what had been building up domestically for over a decade is collapsing - interactively ambivalent with the Middle East policy of our so-called West! And all of this while Trump has not yet officially taken over the office again. In his first term, President-elect Donald Trump imposed tariffs on imports of steel and aluminum and on products from China. With his second term set to start in January 2025, Trump has promised to impose additional tariffs on more countries - including the United States’ closest trade partners. At the end of November, Trump announced plans to impose 25 percent tariffs on Canada and Mexico and an additional 10 percent tariff on goods from China. On Weekend, he couldn't and didn't want to hold back in an interview at the weekend and said: "The tariffs make us rich!" Which is basically true - but only if what is no longer bought from abroad is produced again in the USA! And that is the crucial point. The hare is buried in the pepper here! Because that means balancing out the negative foreign trade balance - or foregoing prosperity. And the USA certainly won't want that. Therefore, MAGA no longer seems to be countered by all critics, let alone Trump personally being denounced as a racist, anti-Semite, fascist, whatever. No! Rather, colleagues in his politics, both at home and abroad, are beginning to engage with him and the MAGA economic policy. Just like China Daily yesterday: Tariffs are bad for business, bad for US firms and consumers, and bad for all trading partners. Here we try again - as a German Croat, Catholic friend of Jews. Who sees himself as a friend of the USA - but clearly does not perceive its outspoken enemies, such as China, Russia, and or even Iran, as enemies. But as fellow human beings, political neighbors with whom it is important to live healthily, peacefully, self-confidently and freely, with one another and/or next to one another. “Another cow, another wood!” is a realization that I quickly understood when dealing with FOREX. And/Or should I better write: "Another Wood - another Bulls or Bears." What also motivates me to deal with foreign exchange trading, namely the DXY , every day. Because the price action, especially the DXY , has so many possibilities for influence that it is easy to lose track of things on a daily basis - and can even get bogged down in topics that are not relevant.Why does Trump pursue such a tariff policy?
Through Made In USA he is trying to make the USA financially and materially independent of foreign countries! Because without products from abroad, let alone money, i.e. acceptance of the current level of debt, the USA would be a so-called banana republic - let's not kid ourselves. In short: the USA lives on the credit of other countries and/or consumes their products, uses their services! What can be understood if you`re studying the US budget deficit and/or the US foreign balance of payment (trade balance). Which is why Trump apparently sees these tariffs as a source of income and as compensation for the fact that evil foreign countries don't buy enough American products. Why? Because maybe, for example, Made In China is simply good and cheaper? In the interview, Trump also admitted for the first time that the tariffs could cause inflation to rise - which diametrically contradicts his promise to bring prices down. A good, deep and detailed analysis of the ITIF (Information Technology & Information Foundation) worth reading can be found here: “Which US Allies Are Most Likely to Face Trump Tariffs—and How Can They Avoid the Wrath of an “America First” Doctrine?” And that brings us to the topic of the week: the US inflation data on Wednesday and/or PPI data on Thursday. Which will then also persuade the FED to (not) turn the interest rate screw. A friend of mine who is a cfd online broker analyst told me “that it can be assumed that a few other central banks, in addition to the ECB, will lower interest rates this week.”
- Will the bulls recapture the terrain above 106.517 points again?
- Will the bears recapture the terrain under 104.447 points again?
Those were the two questions last calendar week - to learn something! And what have we learned? Both bears and bulls were not that strong. Looking back, I may have to admit that, for better or worse, I defined the price action a little too far apart. But I think we should give ourselves time until 2025. Even until January 20th, when Trump is officially back in the office. Because then the cards are shuffled again as far as the price action is concerned. And until then, we should continue to be content with the same question. Because the price action between 107.348 points (Annual Year High 2023 from 2023/10/03) and/or 106.517 points (1st Annual Year High 2024 from 2024/04/16) are groundbreaking. Last week before the bears took over. pathbreaking for last week, and/or this week after
DXY closed at 105.970 points this weekend, after last weekend 105.782 points. Which is why it looks like we will see a DXY down to 104.447 points from Friday, the 2024/08/02.
“My peculiarity is that I don't have a particular style of investing or, more exactly, I try to change my style to fit the conditions.”
George Soros
- Will the bulls recapture the terrain above 106.517 points again?
- Will the bears recapture the terrain under 104.447 points again?
It looks like we will see a
DXY down to 104.447 points from Friday, the 2024/08/02 because a price action until this price action zone and/or even below is definitely within the scope of probability. Because looking back, between the annual highs of 2024 and/or 2023, we can now see something like a bearish trend reversal formation in the DXY chart. Admittedly not as big as the bullish trend reversal formation - but at least a bearish counter reaction to the previous bullish one. And this could send the DXY even until around and/or down under 104.447 points from Friday, the 2024/08/02. When fears arose in the financial market that the US unemployment rate would skyrocket, the Fed would have to cut interest rates to prevent an US recession, and as a result, US inflation would inflate again - and we were nevertheless cyclical as history tells us still fall into a US recession. However, will it happen? It will be like it will be! And/Or allow me to use the words of El-Erian: “Fed Will Be Comfortable Cutting Rates”, as you can hear on Bloomberg Surveillance Podcast, from last Friday, as the last US unemployment rate came out.108.071 : 2024/11/22 - Annual Year High 2024
107.348 : 2023/10/03 - Annual Year High 2023
106.517 : 2024/04/16 - 1st Annual Year High 2024
106.490 : 2024/05/01 - 1st False Breakout To New High
106.130 : 2024/06/26 - 2nd False Breakout To New High
106.001 : 2024/12/09 - last price action
104.799 : 2024/07/30 - High Before W Trend Reversal Formation
104.426 : 2024/08/02 - High Of The August 2024 2 Day Sell-Off
102.160 : 2024/08/03 - Low Of The August 2024 2 Day Sell-Off
Be that as it may, both US inflation data on Wednesday and/or PPI data on Thursday will pave the way for the
DXY this week. Which is why I pay a lot of attention to the price action areas mentioned above, because I assume that we will move bullish or bearish in one of the two directions.The
DXY is currently being traded in a downward trend by traders and investors. From Friday, November 22nd, 2024 at 107.710 points & Monday, November 25th, 2024 at 107.504 points. Why is this downward trend line so important? Because it is only a few hours later from the current annual high of 2024 - at the current hour (on Monday, December 9th, 2024 at 12:00 New York time) at 106.050 points - while the current price action is at 106.001 points. So it remains to be seen whether the usd bulls will take over again? Or will the usd bears continue to dominate the terrain? Personally, I assume the second - based on the fact that the US inflation data will be published on Wednesday and/or PPI data on Thursday. And there should be no change in trend before then! Why? Therefore, the low of last week, on Friday, December 6th, 2024 at 105.420 points and/or also the low of the week before last, on Friday, November 29th, 2024 at 105.615 points, are important price action zones. Because a price action below this could bring an acceleration down to the last high, before the big w trend reversal formation, from the summer of 2024, it might be more convenient to wait for the price action for the time being - until Wednesday and/or also Thursday. Because if the last low, of the last 15 trading days, from last Friday, at 105.420 points, did not hold, we would more or less be back below the intraday high in the case of price action when Trump was re-elected (at 106,100 points). Just like at the current hour. So that all Trump DXY bulls - like me too, since back then - who were long at the time would have to ask the question whether the high, in front of the w trend reversal formation, at 104.799 points can even be defended? Because then, after the w-trend reversal formation, we would have a false breakout formation! And that would be a stalemate, so to speak - after Trump's re-election. And based on the points just described, the cards would be available for the coming weeks and months, (not) to be reshuffled, in the case of the DXY, at least for until June 30th, 2025 - the first half of the year 2025.With best wishes
and with good intentions!
Aaron
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