Yen Wobbles, Gold Gleams: A Stirring in Global Currency MarketsThe foreign exchange market witnessed a tug-of-war this week, with the Japanese yen (JPY) taking center stage. Speculation surrounding potential intervention by Japanese authorities to prop up the weakening yen against the US dollar (USD) sent ripples through the currency landscape. Meanwhile, the US Dollar Index (DXY), a broad measure of the greenback's strength, dipped, impacting the price of gold, which became more attractive to some buyers.
The Yen's Woes: Intervention or Market Forces?
The Japanese yen has been on a depreciating streak recently, driven by a widening gap between Japanese and US interest rates. Japan's central bank, the Bank of Japan (BOJ), maintains an ultra-loose monetary policy with near-zero interest rates, while the US Federal Reserve is signaling a more hawkish stance with potential interest rate hikes on the horizon. This disparity makes yen-denominated assets less appealing to investors seeking higher returns, pushing the yen's value down.
The recent rumors of intervention suggest that Japanese authorities are concerned about the rapid depreciation of the yen. A weaker yen can be a double-edged sword. While it makes Japanese exports more competitive in the global marketplace, it also pushes up the cost of imported goods, leading to potential inflationary pressures within Japan.
Intervention's Effectiveness: A Double-Edged Sword
Currency intervention involves a central bank buying or selling its own currency to influence its exchange rate. In this case, buying yen would aim to strengthen it against the dollar. However, the effectiveness of such interventions depends on various factors.
• Market Sentiment: If the market heavily anticipates further depreciation, a one-time intervention might have a limited impact. The BOJ would need to signal a sustained commitment to supporting the yen for a more significant effect.
• Ammunition: Intervention requires significant financial resources. The BOJ's foreign exchange reserves would play a crucial role in its ability to sustain intervention efforts.
The Greenback's Sway: DXY Dips, Gold Gleams
The US Dollar Index (DXY) gauges the value of the US dollar relative to a basket of major currencies, including the euro (EUR), the Japanese yen (JPY), the British pound (GBP), and others. This week's dip in the DXY indicates a weakening of the US dollar against this basket of currencies.
This can be attributed to several factors, including:
• Profit-taking: After a period of strength, some investors might be taking profits from their dollar-denominated holdings.
• Global Risk Aversion: Increased global uncertainty due to geopolitical tensions or economic concerns can lead investors to seek haven currencies, potentially weakening the dollar.
Gold's Allure: A Beneficiary of a Weaker Dollar
Gold is often perceived as a safe-haven asset during times of market volatility or economic uncertainty. When the US dollar weakens, gold becomes cheaper for buyers holding other currencies. This week's dip in the DXY could be contributing to some increased interest in gold.
However, gold's price is influenced by various factors beyond the dollar's strength. Interest rates, inflation, and investor sentiment all play a role.
Looking Ahead: A Dynamic Landscape
The global currency market remains a dynamic environment, and the events of this week highlight how various factors can interact and influence exchange rates. The future direction of the yen and the DXY will depend on a combination of economic data releases, central bank actions, and broader market sentiment.
Here are some key factors to watch in the coming days:
• BOJ Policy Statements: Any signals from the BOJ regarding potential adjustments to its monetary policy could impact the yen's valuation.
• US Economic Data: Upcoming US jobs reports and inflation data can influence the Federal Reserve's monetary policy decisions, potentially impacting the DXY.
• Geopolitical Developments: Global events with significant economic implications can trigger market volatility and impact currency valuations.
By staying informed about these developments, market participants can make informed decisions about their currency positions and potentially take advantage of market opportunities.
Dollar
Attention! Signs That Our Pullback Is Over.Traders,
Previously, you know that I had anticipated that our pullback might last a bit longer through May. However, today the charts are showing me that this might not be the case.
Let's start with the SPY. Originally, I had predicted a touch of the bottom of the RED channel. Then, based upon my analysis of the dollar, VIX, precious metals, and mega-corp stocks, I thought that it might be possible for SPY to even enter into the orangish-yellow area.
Today, the SPY has popped back above the RED channel and is now doing battle with our 50 Day SMA. This is a bullish indicator for sure. If we can beat the 50 day by CoB today, we'll have a fairly good indicator that our pullback may be over. We'll need more indicators to agree of course, but this is a good start.
The VIX agrees rn, as it has broken below support and fear continues to drop.
The dollar also agrees. Previously, I had anticipated a touch of that 107 level. Nope. The dollar has decided to break down and out of our bearish megaphone pattern early. We knew it was going to happen soon and so we were prepared. I am happy to report the news because with the dollar down and the VIX down you all know what this usually indicates for stocks right? UP.
...And our blow-off top continues into the election months as expected. Then a crash.
Of course, we'll need a confirmation candle on the daily for all of the above. If we get that, on we go. Watch all of these today and on Monday into next week. Monday (and next week) will be key as those days will give us the confirmation candle that we need, especially for the VIX and DXY. If they don't continue to break down, that will be our first warning that this was all a big head fake and we'll still have further pullback to weather out.
This all influences crypto. That is why it is necessary to track.
As always, I'll keep you up to date on these developments.
$DXY down, $BTC up - The crazy (but logic) correlationCRYPTOCAP:BTC just printed a "magical" green candle, after a kinda "bearish" upward movement with a lot of divergences. No one was expecting an upward movement like this, and really caught bears and shorters by surprise. The short squeeze here was brutal and a lot of shorters must be in pain.
Anyone could be asking themselves, "what the hell just happened?". This is the time where traders blame "manipulation" and "market makers" as the ones who move the market to their interests, with such a, we could say, "irracional" price action.
Well... There COULD be an explanation.
Historically DXY (The index that measures the strenght of US Dollar in the financial market) have had an inverse correlation to the price of Bitcoin and viceversa.
It has some kind of logic, since, if Bitcoin is bought with dollars, then if dollar lose its value, then you need more dollars to buy Bitcoin! simple math, simple logic. We are not sure if the graphs are 100% correlated themselves, but it makes sense!
Here you can see that I applied the TVC:DXY graph over CRYPTOCAP:BTC graph, but the TVC:DXY is INVERTED, meaning that every time TVC:DXY went up, you can see it here going down. So you can see now more clearly the direct correlation both have.
TVC:DXY just broke a trendline and printed a very strong red candle JUST at the very same time BTC did y massive green candle a liquidated short positions at very important sell zones.
It's kind of easy to predict a big movement of any of both, if one of them does a big move at some point, because you can expect the other to do a big move at the same time or some time later.
Keep an eye ALWAYS on DXY when you are trading Bitcoin or any crypto.
It IS a finantial advice.
Eur/Usd Ready to massive sell 155 pips!!Based on previous post i talked about how eurusd has broken. the head and shoulder neckline and price is now retresting the neckline has resistance, still the interest rate is neutral which mean dollar will gain liquidity cause of the interest rate differential so we see price respecting the 31.8% fib level which is also in confluence with the POC level of activity volume
NOTE; The only thing you have to worry about is NFP news later tomorrow and some news today. make sure you put stop loss and manage your risk. there is small probably it can do a fake out!
Follow me for more breakdown
DXY Index is Ready to Fill GAP🚀🏃♂️The DXY index is moving in the Ascending Channel and seems to have broken the 🔴 Heavy Resistance zone($105.88-$104.65) 🔴, and is currently moving in a small Descending Channel and making a pullback to this zone.
🌊According to the theory of Elliott waves , it seems that the DXY index has succeeded in completing the Zigzag correction(ABC/5-3-5) inside the descending channel .
💡Also, we can see Regular Divergence(RD+) between two Consecutive Valleys .
🔔I expect the DXY index to Gp UP to at least the 🔵 GAP($106.613-$106.504) 🔵after breaking the upper line of the descending channel .
❗️⚠️Note⚠️❗️: If the DXY index can break the lower line of the descending channel, we can expect the DXY index to drop more.
U.S.Dollar Currency Index ( DXYUSD ) Analyze, 4-hour time frame⏰.
Do not forget to put Stop loss for your positions (For every position you want to open).
Please follow your strategy; this is just my Idea, and I will gladly see your ideas in this post.
Please do not forget the ✅' like '✅ button 🙏😊 & Share it with your friends; thanks, and Trade safe.
SPX has toppedthere is a confluence of time and fib levels, the market will fall in 1-4 weeks. what will be the narrative ? idk , there is an Elliott wave count that says this is a major yearly high, but I don't want to believe it cause that would be catastrophic for the world, I hope it's just a pullback of 10-15%.
EURUSD - BEARISH SCENARIO 📉
As We Talked in The Previous Analysis:
The Price Broke The Support Level (1.07431 - 1.06950) .
At The Moment, The Price Has Pulled Back to This Key Level Which Has Become The resistance Level.
So, Let's Expect The Bearish Scenario:
If The Market Breaks and Closes Below The Higher Low (1.06780 - 1.07245).
We Will See a Bearish Move📉
TARGET: 1.05755🎯
UJLike GJ, I am staying very far away.
WEEKLY
We are currently testing with a hanging man, which is usually a reversal candlestick, so we will keep waiting for it to complete as it can change.
DAILY
This is the highest price UJ has ever crossed in its history, which indicates the strength of the dollar to the Yen. Which is why we can watch as well what the DXY is doing as this is the index to give us ideas of where the market is going.
4H
We have been in an ascending channel, this is only the second touch of the touch of the channel so we cannot assume yet that there will be a drop. If we get an override through pattern confirmation or candlestick confirmation then we could look for shorts. We are in an expanding channel within an ascending channel, so we could actually just be continuing to the upside and we are mid-range so it's not best to do anything.
1H
Just stay watching.
GBPUSD - Short Signal from 1.26GBPUSD H4
This chart highlights the H4 trend edging towards our sell zone price of 1.26. There are several confluences converging at this price level, bolstering our anticipation of a reversal and a resurgence in dollar strength.
We've taken proactive measures by setting alerts and now await developments with patience. This forthcoming bullish extension could be the catalyst we've been waiting for. Stay tuned for further updates
Japanese Yen likely reaching a bottom, short term at leastLots of talk about the #Dollar & #Yen as of the last day.
US #Dolalr ( TVC:DXY ) has done well for some time.
VS
We've spoken on Japan a few times over the last year, has been the opposite.
Daily shows that this trade is exhausting SHORT TERM! Look at that volume!
Likely Japanese govt is intervening!
BIG SHORT XAUUSD DON'T MISS ITWhy might Gold prices decline?
Persistent Inflation: When prices exhibit stickiness, it means they don't adjust swiftly to changes in supply, demand, or the overall economy. If inflation remains high despite efforts by the Federal Reserve (the Fed) to manage it through interest rate adjustments, this scenario is termed sticky inflation.
Federal Reserve and Interest Rates: Typically, the Federal Reserve cuts interest rates to bolster economic activity or counter economic downturns. Initially, in response to high inflation, the Fed might lower interest rates to spur borrowing and spending, thus stimulating economic growth. However, if inflation remains stubbornly high or continues to climb, the Fed might pause or reverse its rate-cutting measures to curb further inflationary pressures.
Impact on Gold Prices: Gold is often seen as a hedge against inflation. As inflation increases, investors may turn to gold as a store of value since it tends to preserve purchasing power better than fiat currencies during inflationary periods. Yet, if the Fed stops cutting rates due to sticky inflation, it could suggest a potential economic slowdown or a tightening of monetary policy, potentially easing inflationary pressures in the long run.
Market Sentiment and Expectations: If investors believe that the Fed's decision to halt rate cuts will effectively address sticky inflation and stabilize the economy, it could shift market sentiment. Investors may become less worried about inflation and less inclined to hold onto gold as a hedge. Consequently, this reduced demand for gold could lead to a decline in its price.
In summary, if sticky inflation prompts the Fed to pause rate cuts, it could mitigate inflationary pressures and potentially diminish the attractiveness of gold as a safe haven asset, causing its price to decline. However, market dynamics are intricate and influenced by various factors beyond inflation and interest rate policies.
Let us know what you think? make sure to leave a like :)
Greetings,
Zila
USDJPY: Why It Dropped? 🇺🇸🇯🇵
This morning, USDJPY dropped by more than 500 pips this morning.
If you are looking for a reason why it happened,
remember that historical structure always leaves clues.
The price perfectly respected a historic structure of 1990th.
Today, we see a perfect example how important are historical levels,
and how the market remembers the things that happened more than 30 years ago.
Learn key levels because that is the key for successful trading.
❤️Please, support my work with like, thank you!❤️
EURUSD - Long Trade IdeaHello folks,
I am generally bearish on EURUSD at the moment, and I am still waiting for lower prices, but we could see more bullish momentum first. The logic behind this is of course to lure more bullish traders into the market, but I also do not see any significantly high impact news yet.
However, if you see my other analysis, I am looking for a monthly close below the Monthly iFVG in order to be used as resistance, as mentioned in my previous analysis. That being said, take this trade idea as less than a A+ setup. Most of the probability of this trade lies price being at a ranged Discount, and in the efficacy of my R2F Gap coupled with a possible London Judas Swing.
Safe trading!
- R2F
Will It Hold?Traders,
We are right on track with literally everything as discussed in previous chart updates and videos. No surprises this week, thus, the short weekend update video. The only new development is that Bitcoin is testing our ever-important multi-year trendline yet again. Will the bulls win this tug of war or will the bears finally find the strength to pull price across and to the downside?
Let’s talk about that.