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Gold Reversal Confirmed: Bearish Targeting 2,878 SupportThis chart shows a clear double-top pattern at the resistance zone around 2,960, indicating potential bearish momentum. The price has broken below a trendline, confirming weakness. A retest around 2,934 has occurred, and the price is now declining. The next key support level is around 2,878, which could act as a potential target for sellers. If bearish momentum continues, a deeper drop may follow. - First target: 2,900 (psychological level and minor support) - Second target: 2,878 (major support zone) If bearish momentum continues and 2,878 breaks, the next possible target could be around 2,860 for an extended move.
OANDA:XAUUSDShort
by TRADE_CENTER_1
2
Potential bullish rise?US Dollar Index (DXY) has reacted off the pivot which has been identified as an overlap resistance and could rise to the 1st resistance that lines up with the 50% Fibonacci retracement. Pivot: 107.09 1st Support: 106.64 1st Resistance: 108.04 Risk Warning: Trading Forex and CFDs carries a high level of risk to your capital and you should only trade with money you can afford to lose. Trading Forex and CFDs may not be suitable for all investors, so please ensure that you fully understand the risks involved and seek independent advice if necessary. Disclaimer: The above opinions given constitute general market commentary, and do not constitute the opinion or advice of IC Markets or any form of personal or investment advice. Any opinions, news, research, analyses, prices, other information, or links to third-party sites contained on this website are provided on an "as-is" basis, are intended only to be informative, is not an advice nor a recommendation, nor research, or a record of our trading prices, or an offer of, or solicitation for a transaction in any financial instrument and thus should not be treated as such. The information provided does not involve any specific investment objectives, financial situation and needs of any specific person who may receive it. Please be aware, that past performance is not a reliable indicator of future performance and/or results. Past Performance or Forward-looking scenarios based upon the reasonable beliefs of the third-party provider are not a guarantee of future performance. Actual results may differ materially from those anticipated in forward-looking or past performance statements. IC Markets makes no representation or warranty and assumes no liability as to the accuracy or completeness of the information provided, nor any loss arising from any investment based on a recommendation, forecast or any information supplied by any third-party.
TVC:DXYLong
by ICmarkets
Bitcoin Slips: Buy the Lows or Ride the Sell-Off? Following an extended expanding consolidation from Dec 2024 – Jan 2025, bearish pressure intensified after a downside breakout, increasing the probability of a double-top formation at 108,360 – 109,350. This raises concerns about a potential drop towards the previous major support-turned-resistance zone at 72,000 – 74,000. 🔹 Momentum Check: The RSI has hit oversold levels last seen in Aug 2024, when BTCUSD found a bottom before rallying past 100K. 🔸 Bullish Scenario: If BTCUSD holds above 82,000, upside targets include 86,500, 93,000, and potentially a retest of 109,000. 🔻 Bearish Scenario: A close below 82,000 could accelerate declines toward 79,500 & 72,000, aligning with the 50% & 61.8% Fibonacci retracement of the Aug 2024 – Jan 2025 uptrend. - Razan Hilal, CMT
FOREXCOM:BTCUSD
by FOREXcom
USDX, DXYUSDX price is approaching the support zone of 106.45-105.36. If the price fails to break through the main support zone of 105.36, it is expected that there is a chance that the price will rebound. On the contrary, if the price can break through the level of 105.36, it will have a negative impact on the dollar. 🔥Trading futures, forex, CFDs and stocks carries a risk of loss. Please consider carefully whether such trading is suitable for you. >>GooD Luck 😊 ❤️ Like and subscribe to never miss a new idea!
EIGHTCAP:USDXLong
by Serana2324
DXY Dollar Index Market Bearish Heist Plan🌟Hi! Hola! Ola! Bonjour! Hallo!🌟 Dear Money Makers & Robbers, 🤑 💰🐱‍👤🐱‍🏍 Based on 🔥Thief Trading style technical and fundamental analysis🔥, here is our master plan to heist the DXY Dollar Index Market. Please adhere to the strategy I've outlined in the chart, which emphasizes short entry. Our aim is the high-risk Green Zone. Risky level, oversold market, consolidation, trend reversal, trap at the level where traders and bullish thieves are getting stronger. 🏆💸Book Profits Be wealthy and safe trade.💪🏆🎉 Entry 📈 : "The heist is on! Wait for the breakout (37800) then make your move - Bearish profits await!" however I advise placing Sell Stop Orders below the breakout MA or Place Sell limit orders within a 15 or 30 minute timeframe. Entry from the most recent or closest low or high level should be in retest. I Highly recommended you to put alert in your chart. Stop Loss 🛑: Thief SL placed at 38500 (swing Trade Basis) Using the 4H period, the recent / swing high or low level. SL is based on your risk of the trade, lot size and how many multiple orders you have to take. Target 🎯: 36500 (or) Escape Before the Target 🧲Scalpers, take note 👀 : only scalp on the Short side. If you have a lot of money, you can go straight away; if not, you can join swing traders and carry out the robbery plan. Use trailing SL to safeguard your money 💰. 📰🗞️Fundamental, Macro, COT, Sentimental Outlook: DXY Dollar Index Market is currently experiencing a Bearish trend., driven by several key factors. ⚡Fundamental Analysis Fundamental factors driving DXY focus on U.S. economic conditions, Fed policy, and global currency dynamics. Interest Rates: U.S. Federal Reserve: Rates steady at 3-3.5%, down from 2024’s 4.5-5%. Fed officials stress data dependency, with no cuts signaled despite weak PMI (50.4) and jobless claims (219,000 vs. 215,000 forecast). Real yields (10-year Treasury at 3.8%, ~1% inflation-adjusted) support USD. Other Countries: ECB at 2.5%, BoJ at 0.25-0.5%, BoE at 4-4.5%—U.S. yield advantage persists, though narrowing. Impact: Bullish for DXY, tempered by global easing. Inflation: U.S.: PCE at 2.6% YoY (Jan 2025), above the Fed’s 2% target, with producer inflation hotter-than-expected (X posts). Inflation fears linger, supporting USD. Other Countries: Eurozone at 2.8%, Japan at 2.5%, UK at 2.5-3%—global inflation pressures USD rivals less. Impact: Bullish, as U.S. inflation sustains Fed hawkishness. Economic Growth: U.S.: Mixed signals—PMI at 50.4 (near stagnation), jobless claims up, but ADP jobs beat at 183,000 (Jan 2025). Tariffs add uncertainty. Other Countries: China at 4.5% (slowing), Eurozone at 1.2%, Japan at 1%—U.S. outperforms peers. Impact: Mildly bullish, U.S. resilience aids USD. Safe-Haven Flows: USD competes with JPY and CHF amid tariff risks and geopolitical flare-ups (Russia-Ukraine, Middle East). Recent yen strength (X posts) pressures DXY. Impact: Mildly bearish, global risk-off challenges USD dominance. Trade Balance: U.S. deficit persists, but Trump’s tariffs (25% Mexico/Canada, 10% China) aim to bolster USD via trade shifts. Impact: Bullish long-term, short-term neutral. ⚡Macroeconomic Factors U.S.-focused with global context: U.S. Policy: Fed’s tighter stance vs. global easing (ECB, BoJ) favors USD. Trump’s tariff threats add volatility, potentially strengthening USD via trade protectionism. Global Growth: 3% (Morgan Stanley), with China slowing and Eurozone stagnant (PMI 46.2). U.S. relative strength supports DXY. Commodity Prices: Oil at $70.44 pressures import-heavy peers (Japan), mildly weakening JPY vs. USD. Currency Dynamics: Yen strength and EUR softness (EUR/USD below 1.0500) drag DXY lower recently, ⚡Commitments of Traders (COT) Data Hypothetical COT (mid-Feb 2025, CME): Large Speculators: Net long USD ~70,000 contracts (down from 80,000 post-110 peak), cooling after profit-taking. Commercial Hedgers: Net short USD ~80,000, hedging export exposure as tariffs loom. Open Interest: ~150,000 contracts, stable, reflecting U.S. trader engagement. Key Insight: Speculative longs suggest bullish bias, but moderation hints at consolidation. ⚡Market Sentiment Analysis Includes retail, institutional, and corporate traders: Retail Sentiment: U.S. retail traders likely 60% short DXY at 106.000 (hypothetical broker data), betting on yen/CHF gains. Contrarian upside risk if shorts unwind. Institutional Traders: U.S. funds (e.g., Citi, HSBC) mixed—bearish short-term (DXY to 96.87, Citi Hong Kong), bullish long-term (WalletInvestor to 119.193). Sentiment leans cautious. Corporate Traders: U.S. exporters hedge at 106.50-107.00, neutral as tariffs loom; European firms favor EUR weakness. Social Media (X): notes yen-driven DXY weakness, sees bearish momentum to 106.15—trending bearish. Broker Data: U.S. IG sentiment ~55% long—balanced positioning. ⚡Quantitative Analysis Moving Averages: 50-day SMA (106.30), 200-day SMA (105.50)—price below 50-day, above 200-day, neutral signal. RSI: 45 (daily), bearish momentum fading, room for reversal. Bollinger Bands: 105.80-106.80 range, 106.000 at midpoint—consolidation likely. Fibonacci: 38.2% retracement from 110.00-102.50 at 105.62—key support holds. Volatility Model: Implied volatility (1-month) at 7%, suggesting 0.75-point monthly range (±0.7%). ⚡Intermarket Analysis USD/JPY: At 150.00, yen strength pressures DXY; drop to 145 could accelerate declines. EUR/USD: Below 1.0500, EUR weakness supports DXY mildly. Gold: XAU/USD at 2940 (risk-off proxy) inversely pressures USD. Equities: S&P 500 range-bound (5960-6120) reflects stability, neutral for DXY. Bonds: U.S. 10-year yield at 3.8% vs. JGB at 0.9%—yield gap aids USD. ⚡News and Events Analysis Recent: Trump’s tariff threats (25% Mexico/Canada, 10% China, Feb 23-25) fuel risk-off, pressuring DXY via yen strength (X posts). Weak U.S. PMI and jobless claims offset by PCE at 2.6% (Jan 2025). Upcoming: U.S. PCE data (Feb 28) critical—hotter data could lift DXY, softer data bearish. Fed rhetoric pending. Impact: Bearish near-term from risk-off, bullish potential from Fed stance. ⚡Overall Summary Outlook DXY at 106.000 balances U.S. resilience (Fed policy, inflation) against global risk-off pressures (tariffs, yen strength). Fundamentals favor USD long-term, but macro risks and sentiment (retail shorts, X bearishness) suggest near-term softness. COT shows cautious longs, quant signals consolidation, and intermarket flows (gold rise, yen strength) lean bearish. Short-term dip to 105.50-105.91 likely, medium-term range-bound with a bullish tilt if Fed holds firm. ⚡Future Prediction Bullish Case: DXY to 108.00-110.00 by Q2 2025 if PCE/Fed bolster USD, tariffs lift trade flows, and risk-on resumes. Bearish Case: Drop to 103.50-105.00 if yen/CHF surge, tariffs falter, or Fed dovishness emerges. Prediction: Mildly bearish short-term to 105.50, then bullish to 108.00 by mid-2025, driven by Fed policy divergence. ⚠️Trading Alert : News Releases and Position Management 📰 🗞️ 🚫🚏 As a reminder, news releases can have a significant impact on market prices and volatility. To minimize potential losses and protect your running positions, we recommend the following: Avoid taking new trades during news releases Use trailing stop-loss orders to protect your running positions and lock in profits 💖Supporting our robbery plan will enable us to effortlessly make and steal money 💰💵 Tell your friends, Colleagues and family to follow, like, and share. Boost the strength of our robbery team. Every day in this market make money with ease by using the Thief Trading Style.🏆💪🤝❤️🎉🚀 I'll see you soon with another heist plan, so stay tuned 🤑🐱‍👤🤗🤩
CAPITALCOM:DXYShort
by Thief_Trader
XAUUSD - 1hr | Wyckoff Event UPDATEWe await the price to confirm the last step (6) to complete the distribution Phase. The price has fallen to SUPPORT as we predicted. Once a LOWER LOWER is formed, the Distribution Phase is complete. Expect gold turn to remain bearish. Falling as low as 2815. BULLS : If the price can respect the support and bounce back above 2910 with strong bullish momentum, we can see the price rally back up to the 2950 area. BEARS : If the price creates the lower low as we are expecting around 2860-2880. Then look for the price to: 1. retest support as far back up to 2910. 2. dramatically fall and continue its pullback as low as 2800-2820
EIGHTCAP:XAUUSD
by nikdobii
2025 – The Year of the Normalized Dollar📉💵 2025 – The Year of the Normalized Dollar! 🔥 The U.S. Dollar Index (DXY) is showing clear signs of weakness after breaching key support levels. With interest rate cuts on the horizon and a shift in economic policy, we may be entering a new phase for the dollar’s normalization. 🔍 Key Levels to Watch 🔹 Resistance: 107.5 (Immediate resistance) 🔹 Key Mid Support: 100.95 (Next major level) 🔹 Final Target: 94.8 (Major support & potential bottom) 📰 Fundamental Factors Driving the Move 💡 Trump’s Dollar Policy: Historically, Trump has favored a weaker dollar to boost exports. His recent remarks during the Executive Order signing on January 23, 2025, reinforce this stance, as he pushes for interest rate cuts and lower energy costs. Remarks by President Trump at Executive Order Signing (January 23, 2025): Q: Mr. President, you said earlier that you would like to see interest rates come down. THE PRESIDENT: Yeah. Q: How much would you like to see them come down? THE PRESIDENT: A lot. Q: And will you talk with Powell? THE PRESIDENT: I’d like to see them come down a lot, and oil prices will come down. And when oil prices come down, everything is going to be cheaper for the American people — and actually for the world — but for the American people. So, I’d like to see oil prices come down. Q: Are you worried that there’s too much going on at once if you’re trying to bring interest rates down and get the economy back going? THE PRESIDENT: No, no. It just works that way. I mean, it just economically works that way. When the oil comes down, it’ll bring down prices, then you won’t have inflation, and then the interest rates will come down. Q: You said that you would demand that the interest rates come down. Do you expect the Fed to listen to you? THE PRESIDENT: Yeah. 📉 What’s Next for the Dollar? 🔸 If 100.95 breaks, we could see further downside, testing the 94.8 region. 🔸 A retest of resistance at 107.5 would be a key test before further declines. 🔸 The global macro environment (oil prices, inflation, and geopolitical shifts) will heavily influence the dollar’s trajectory. 🌍 Economic & Geopolitical Impact Beyond monetary policy, Trump’s trade and labor policies are also playing a role in shaping the inflation outlook. His push for tariffs and tighter immigration policies has led to higher labor costs, causing short-term inflation. However, on the global stage, Trump's potential deal with Putin to resolve the Ukraine conflict could help ease inflation worldwide by stabilizing supply chains and reducing geopolitical risks. With Trump pushing for rate cuts, the Fed under pressure, and DXY losing momentum, could we see a full-scale dollar correction in 2025? Let’s discuss! ⏬ 📢 Follow for more macro insights & market analysis! One Love, The FXPROFESSOR 💙
TVC:DXYShort
by FX_Professor
GBP/USD Approaching Key Reversal ZoneThe GBP/USD pair has reached a critical resistance area around 1.2658, aligning with the 1.13 Fibonacci extension level of the harmonic Gartley pattern. The price action suggests potential exhaustion in the bullish trend, with signs of rejection near this level. A confirmed reversal could lead to a corrective move towards key support zones at 1.2456 and 1.2320. However, if the pair sustains above 1.2685, further upside towards 1.2732 and the HOP level at 1.2843 remains possible.
Short
by BeaucoupPips
USD/JPY Bullish Reversal Setup: Key Levels and TargetsThe USD/JPY chart on the 4-hour timeframe indicates a potential bullish setup. Here's a breakdown of the analysis: 1. Support Zone & Trendline Confluence** - Price is currently reacting to a strong demand zone** around 149.000–149.500, marked in green. - There's also a visible ascending trendline acting as dynamic support, reinforcing the bullish outlook. 2. Change of Character (ChoCH) & Break of Structure (BOS) - A series of **bearish BOS and ChoCH confirm the prior downtrend. - However, the most recent ChoCH to the upside signals a potential shift in market direction. 3. Target Zone & Resistance Area - The next resistance zone** is marked around 152.000, aligning with a supply area. - This is also the short-term bullish target, as indicated on the chart. 4. Potential Trade Setup - If the price holds above the demand zone and breaks the minor resistance at 150.000, bullish momentum could push it toward 152.000. - A higher low formation** would further confirm bullish continuation. 5. Risk Factors - A break below the **strong low (148.800–149.000) could invalidate the bullish setup and signal further downside. Conclusion USD/JPY is showing signs of a potential bullish reversal. If price respects the support and trendline, it could rally toward 152.000. However, a breakdown below 149.000 would invalidate the bullish bias.
Long
by TRADE_CENTER_1
DXY Dollar Index Market Bearish Heist Plan (Day/Swing Trade)🌟Hi! Hola! Ola! Bonjour! Hallo!🌟 Dear Money Makers & Robbers, 🤑 💰🐱‍👤🐱‍🏍 Based on 🔥Thief Trading style technical and fundamental analysis🔥, here is our master plan to heist the DXY Dollar Index Market. Please adhere to the strategy I've outlined in the chart, which emphasizes short entry. Our aim is the high-risk Green Zone. Risky level, oversold market, consolidation, trend reversal, trap at the level where traders and bullish thieves are getting stronger. 🏆💸Book Profits Be wealthy and safe trade.💪🏆🎉 Entry 📈 : "The vault is wide open! Swipe the Bearish loot at any price - the heist is on! however I advise to Place Sell limit orders within a 15 or 30 minute timeframe. Entry from the most recent or closest low or high level should be in retest. Stop Loss 🛑: Thief SL placed at 108.500 (swing Trade Basis) Using the 4H period, the recent / swing high or low level. SL is based on your risk of the trade, lot size and how many multiple orders you have to take. Target 🎯: 105.500 (or) Escape Before the Target 🧲Scalpers, take note 👀 : only scalp on the Short side. If you have a lot of money, you can go straight away; if not, you can join swing traders and carry out the robbery plan. Use trailing SL to safeguard your money 💰. 📰🗞️Fundamental, Macro, COT, Sentimental Outlook: DXY Dollar Index Market is currently experiencing a Bearish trend., driven by several key factors. 💠Fundamental Analysis Weakening US Economy: The US economy's growth is slowing down, which could lead to a decline in the dollar's value. Falling Interest Rates: The US Federal Reserve's decision to cut interest rates could weaken the dollar. 💠Macroeconomic Analysis The US economy's growth, inflation rates, and employment numbers influence the dollar's strength. Global economic trends, such as trade tensions and geopolitical events, also impact the dollar's value. 💠COT Data Analysis Net Short Positions: Institutional traders and large banks have increased their net short positions in the DXY Dollar Index, indicating a bearish sentiment. COT Ratio: The COT ratio has fallen to 1.2, indicating a bearish trend. 💠Market Sentimental Analysis Bearish Sentiment: 55% of client accounts are short on this market, indicating a bearish sentiment. Option Skew: The 25-delta put option skew has increased to 15, indicating a bearish sentiment. 💠Positioning Data Analysis Institutional Traders: Institutional traders and large banks are positioning themselves for a bearish trend, with some predicting a decline to 105.50. Corporate Traders: Corporate traders are also monitoring the index's performance, considering factors like interest rates and global economic trends. 💠Overall Outlook Bearish Trend: The DXY Dollar Index is experiencing a bearish trend, with a potential decline to 105.50. Key Support Levels: 106.57, 105.50. 💠Technical Analysis Moving Averages: The 50-day MA is indicating a bearish trend. Relative Strength Index (RSI): The RSI has fallen to 40, indicating oversold conditions. Bollinger Bands: The lower band breakout indicates a bearish trend. ⚠️Trading Alert : News Releases and Position Management 📰 🗞️ 🚫🚏 As a reminder, news releases can have a significant impact on market prices and volatility. To minimize potential losses and protect your running positions, we recommend the following: Avoid taking new trades during news releases Use trailing stop-loss orders to protect your running positions and lock in profits 📌Please note that this is a general analysis and not personalized investment advice. It's essential to consider your own risk tolerance and market analysis before making any investment decisions. 📌Keep in mind that these factors can change rapidly, and it's essential to stay up-to-date with market developments and adjust your analysis accordingly. 💖Supporting our robbery plan will enable us to effortlessly make and steal money 💰💵 Tell your friends, Colleagues and family to follow, like, and share. Boost the strength of our robbery team. Every day in this market make money with ease by using the Thief Trading Style.🏆💪🤝❤️🎉🚀 I'll see you soon with another heist plan, so stay tuned 🤑🐱‍👤🤗🤩
FXOPEN:DXYShort
by Thief_Trader
5
XAUUSD - 1hr | Wyckoff EventSimple Trading: Distribution Phase First, we can see that gold has started to consolidate. Once we see this, we look back at previous candles to identify the patterns in this phase: (1) preliminary resistance (2) the last buy (3) a retest to confirm support (4) confirm resistance without making a higher high. (5) Higher high (typically a FAKEOUT) We are waiting for the price to confirm the last step (6) to complete the pattern. If the price falls to SUPPORT, creating a LOWER LOWER, the Distribution Phase is complete. Expect gold turn to remain bearish. Falling as low as 2815.
EIGHTCAP:XAUUSDShort
by nikdobii
1
DXY weekly Perspective 23.02.25DXY Analysis & Bias for This Week My outlook for the Dollar Index (DXY) remains bearish, which aligns with my bias for bullish moves on pairs like GU, EU, and Gold. Since price has already broken structure to the downside, I anticipate a retracement to mitigate the newly formed 14-hour supply zone before continuing lower. While price may react bullishly from the 3-hour or 2-hour demand zones I’ve marked, the overall momentum still favors the downside, as seen from the strength of recent bearish candlesticks. Plan of Action: 📌 Once price reaches the 14-hour supply zone, I will wait for lower timeframe confirmations before taking action. 📌 I will also check for any corresponding demand zones on my other pairs to ensure alignment across the board.
TVC:DXYShort
by Hassan_fx
1
DXY - 4H Bearish SignsTVC:DXY has shown an impressive rally from the 100 zone, forming three major bullish legs, each contributing approximately 4% gains. These bullish phases have now brought the index close to the critical 110 level. However, in the third major leg, we observe the formation of three minor legs, signaling some hesitation as it nears the resistance zone. While many expect the index to break through 110 easily, I anticipate price swings around the 109-110 range, and even the possibility of a deeper pullback before resuming its upward trend. With the NFP data release today, we might see increased volatility, offering opportunities for a potential DXY decline before any further rise. Stay alert for sharp market moves! 📉
TVC:DXYShort
by Sober_Trading
9
Will We See the Euro Trading Below Par?CME: Micro EUR/USD Futures ( CME_MINI:M6E1! ) #Microfutures Since the US election last November, the Euro currency has lost ground against the US dollar, with the EUR/USD exchange rate sliding from 1.08 to as low as 1.02. A combination of new policies from the Trump administration aims to strengthen the dollar. Recent efforts to end the geopolitical crisis will not support the euro. On the contrary, they could push the European common currency below the critical 1-dollar level. Quick Review of the EUR/USD Price Trend The euro has swung widely against central bank policies and geopolitical events: • 2020: The Fed implemented massive stimulus measures in response to the pandemic. Lowering interest rates and increasing money supply reduced the value of the USD • 2021: The faster vaccine rollout and quicker reopening of the US economy boosted economic growth and investor sentiment towards the USD • 2022: (1) The Fed raised interest rates to combat inflation, making the USD more attractive to investors compared to the Euro. (2) Europe faced an energy crisis due to its dependence on Russian gas. This crisis led to economic uncertainty and weakened the euro. (3) Ongoing geopolitical tensions created economic instability in Europe, further weakening the euro against the USD • Q4 2022 and 2023: European Central Bank abandoned its long-held zero-rate policy in September 2022. It raised rates eight times to 4.00%. These actions narrowed the interest rate differentials between the US and Europe, and helped the euro rebound • 2024: The EUR/USD moved mainly sideways in the range of 1.06 and 1.12. Fed easing and rebounds of US inflation contributed to the mild volatility. • Q4 2024 to Current. Dollar ascended quickly after the election win of Donald Trump. Investors expect strong dollar with the support of the new America First policies Ukraine Peace Talks and Possible Outcomes On February 12th, Presidents Trump and Putin agreed to immediately start negotiations to end the ongoing conflict in Ukraine. On February 18th, US and Russian officials held peace talks in Saudi Arabia. The two sides agreed to create a high-level team to lead the Ukraine peace talks. Neither Ukraine nor the EU participated in the meeting. How the peace talks would progress remain highly uncertain. Using Game Theory, we could break them down into two mutually exclusive and collectively inclusive outcomes: • Peace: US, Russia, Ukraine and the EU sign a peace agreement to end the conflict and ensure long-lasting peace. Whether it will be a fair treaty is a hotly debated topic. • No-Peace: Peace talks break down. The 3-year-long conflict continues. This could last for years but eventually will lead to a win/loss outcome or a draw. From an investing perspective, “No-Peace” is equivalent to “Risk On”. It may imply higher gold prices, higher energy costs and lower equity value. Meanwhile, “Peace” means “Risk Off”. We may see declining gold, lower oil and gas, and rising stock prices. However, it would be difficult to pick the price direction if we can’t predict the outcome. Peace or No Peace – A Steep Cost for Europe For better or worse, the recent events are a wakeup call to European countries. The US had defense spending totaling $967 billion in 2024, which is 3.49% of its GDP. For a comparison, the total defense spending for EU member states reached $358 billion in 2024. This represents around 1.9% of the EU's GDP • The US accounted for 73% of the defense spending in the 32 countries in NATO • Since 2022, the US contributed to 2/3 of all the financial aids sending to Ukraine The US administration intends to cut its financial support. Europe will have to increase defense spending dramatically. In a worst case, a complete breakdown in Cross-Atlantic relations could see the US exiting NATO and all US troops withdrawing from Europe. How much is the spending gap? In 2024, Russia had defense budget of $462 billion, or 6.7% of its GDP. Ukraine had defense budget of $40 billion, or 22% of its GDP. • EU plus Ukraine spent $64 billion less than Russia in defense budget. In my opinion, in a Peace scenario and with reduced US involvement, the EU defense budget must surpass that of Russia to ensure Ukraine to stay on top. I find this to be 2.5% of GDP. This means a 32% increase or $471 billion in total defense spending. For No-Peace, the EU will be fighting an active war. NATO will need to maintain a standing army of 1 million troops and rebuild an entire defense industry. In this scenario, I feel that the defense budget needs to double 5% of GDP. budget to raise a large army and rebuild an entire defense industry. This means a 163% increase or $942 billion in total defense spending. If the above numbers sound outrageous, Israel, a country constantly fighting for its survival, will serve as a good refence point. In 2024, Israel's defense spending amounted to 117.5 billion Israeli shekels (around $32.5 billion USD), which is 6.7% of its GDP. The EU has an estimated GDP growth at 0.9% in 2024 and a forecast growth of 1.5% in 2025. The defense budget increase will cause mandatory cuts in non-defense spending. The combined effect will be negative, pushing GDP growth into a negative territory. In my opinion, re-arming Europe is critical to its survival. However, defense buildup comes at a steep cost. The expectations of lower GDP growth will push the value of Euro currency lower, likely below the 1-dollar critical level. Commitment of Traders shows diminishing bullish sentiment The CFTC Commitments of Traders report shows that on February 11th, total Open Interest (OI) for CME Euro FX Futures is 622,873 contracts. “Asset Manager” (i.e., hedge funds) own 338,182 in Long, 177,937 in Short and 35,597 in Spreading. • While they maintain a long-short ratio of 1.9:1, hedge funds have reduced long positions by 1,014 while increasing short positions by 2,249. • This indicates that “Smart Money” is becoming less bullish on the Euro. Trade Setup with Micro Euro/USD Futures If a trader shares a similar view, he could express his opinion by shorting the CME Micro Euro/USD Futures ($M6E). M6E contracts have a notional value of 12,500 euro. With February 19th settlement price of 1.0435, each March contract (M6EH5) has a notional value of $13,044. Buying or selling one contract requires an initial margin of $260. Hypothetically, a trader shorts March M6E contract and the euro drops to $0.99. A short futures position would gain $668.75 (= (1.0435 – 0.99) x $12500). Using the initial margin as a cost base, a theoretical return would be +257% (= 668.75 / 260). The risk of shorting euro futures is rising euro. Investors could lose part of or all their initial margin. A trader could set a stop loss while establishing his short position. In the above example, the trader could set a stop-loss at 1.06 when entering the short order at 1.0435. If euro rebounds, the maximum loss would be $206.25 ( = (1.06 – 1.0435) *12500). To learn more about all the Micro futures and options contracts traded on CME Group platform, you can check out the following site: www.cmegroup.com The Leap trading competition, #TheFuturesLeap, sponsored by CME Group, is currently running at TradingView. I encourage you to join The Leap to sharpen your trading skills and put your trading strategies at test, competing with your peers in this paper trading challenge sponsored by CME Group. www.tradingview.com Happy Trading. Disclaimers *Trade ideas cited above are for illustration only, as an integral part of a case study to demonstrate the fundamental concepts in risk management under the market scenarios being discussed. They shall not be construed as investment recommendations or advice. Nor are they used to promote any specific products, or services. CME Real-time Market Data help identify trading set-ups and express my market views. If you have futures in your trading portfolio, you can check out on CME Group data plans available that suit your trading needs www.tradingview.com
CME_MINI:M6E1!Short
by JimHuangChicago
Daily DXY The US Dollar Index (DXY) is currently indicating the likely direction after closing below 106.965. I anticipate a move back to the 107.200-250 range before continuing its bearish swing. Several confluences support this, including the reversal point, an ascending trendline, a descending trendline, a rejection candlestick, the daily 0.382 Fibonacci level, the 4-hour 0.5 Fibonacci level, and a 4-hour order block. My target for the DXY is 106.083. As for gold, it has reached a new all-time high of 2954.944. I expect a pullback before it heads higher, potentially towards the 3000 level. 4hr DXY Chart 1hr DXY Chart 30m Gold Chart
TVC:DXYShort
by ChartStrategist
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