Economic Red Alert: China Dumps $8.2T in US BondsThe Great Unwinding: How a World of Excess Supply and Fading Demand Is Fueling a Crisis of Confidence
The global financial system, long accustomed to the steady hum of predictable economic cycles, is now being jolted by a dissonant chord. It is the sound of a fundamental paradigm shift, a tectonic realignment where the twin forces of overwhelming supply and evaporating demand are grinding against each other, creating fissures in the very bedrock of the world economy. This is not a distant, theoretical threat; its tremors are being felt in real-time. The most recent and dramatic of these tremors was a stark, headline-grabbing move from Beijing: China’s abrupt sale of $8.2 trillion in U.S. Treasuries, a move that coincided with and exacerbated a precipitous decline in the U.S. dollar. While the sale itself is a single data point, it is far more than a routine portfolio adjustment. It is a symptom of a deeper malaise and a powerful accelerant for a crisis of confidence that is spreading through the arteries of global finance. The era of easy growth and limitless demand is over. We have entered the Great Unwinding, a period where the cracks from years of excess are beginning to show, and the consequences will be felt broadly, from sovereign balance sheets to household budgets.
To understand the gravity of the current moment, one must first diagnose the core imbalance plaguing the global economy. It is a classic, almost textbook, economic problem scaled to an unprecedented global level: a glut of supply crashing against a wall of weakening demand. This imbalance was born from the chaotic response to the COVID-19 pandemic. In 2020 and 2021, as governments unleashed trillions in fiscal stimulus and central banks flooded the system with liquidity, a massive demand signal was sent through the global supply chain. Consumers, flush with cash and stuck at home, ordered goods at a voracious pace. Companies, believing this trend was the new normal, ramped up production, chartered their own ships, and built up massive inventories of everything from semiconductors and furniture to automobiles and apparel. The prevailing logic was that demand was insatiable and the primary challenge was overcoming supply-side bottlenecks.
Now, the bullwhip has cracked back with a vengeance. The stimulus has faded, and the landscape has been radically altered by the most aggressive coordinated monetary tightening in modern history. Central banks, led by the U.S. Federal Reserve, hiked interest rates at a blistering pace to combat the very inflation their earlier policies had helped fuel. The effect has been a chilling of economic activity across the board. Demand, once thought to be boundless, has fallen off a cliff. Households, their pandemic-era savings depleted and their purchasing power eroded by stubborn inflation, are now contending with cripplingly high interest rates. The cost of financing a home, a car, or even a credit card balance has soared, forcing a dramatic retrenchment in consumer spending. Businesses, facing the same high borrowing costs, are shelving expansion plans, cutting capital expenditures, and desperately trying to offload the mountains of inventory they accumulated just a year or two prior.
This has created a world of profound excess. Warehouses are overflowing. Shipping rates have collapsed from their pandemic peaks. Companies that were once scrambling for microchips are now announcing production cuts due to a glut. This oversupply is deflationary in nature, putting immense downward pressure on corporate profit margins. Businesses are caught in a vise: their costs remain elevated due to sticky wage inflation and higher energy prices, while their ability to pass on these costs is vanishing as consumer demand evaporates. This is the breeding ground for the "cracks" that are now becoming visible. The first casualties are the so-called "zombie companies"—firms that were only able to survive in a zero-interest-rate environment by constantly refinancing their debt. With borrowing costs now prohibitively high, they are facing a wave of defaults. The commercial real estate sector, already hollowed out by the work-from-home trend, is buckling under the weight of maturing loans that cannot be refinanced on favorable terms. Regional banks, laden with low-yielding, long-duration bonds and exposed to failing commercial property loans, are showing signs of systemic stress. The cracks are not isolated; they are interconnected, threatening a chain reaction of deleveraging and asset fire sales.
It is against this precarious backdrop of a weakening U.S. economy and a global supply glut that China’s sale of U.S. Treasuries must be interpreted. The move is not occurring in a vacuum. It is a calculated action within a deeply fragile geopolitical and economic context, and it carries multiple, overlapping meanings. On one level, it is a clear continuation of China’s long-term strategic objective of de-dollarization. For years, Beijing has been wary of its deep financial entanglement with its primary geopolitical rival. The freezing of Russia’s foreign currency reserves following the invasion of Ukraine served as a stark wake-up call, demonstrating how the dollar-centric financial system could be weaponized. By gradually reducing its holdings of U.S. debt, China seeks to insulate itself from potential U.S. sanctions and chip away at the dollar's status as the world's undisputed reserve currency. This $8.2 trillion sale is another deliberate step on that long march.
However, there are more immediate and tactical motivations at play. China is grappling with its own severe economic crisis. The nation is battling deflation, a collapsing property sector, and record-high youth unemployment. In this environment, its primary objective is to stabilize its own currency, the Yuan, which has been under intense downward pressure. A key strategy for achieving this is to intervene in currency markets. Paradoxically, this intervention often requires selling U.S. Treasuries. The process involves the People's Bank of China selling its Treasury holdings to obtain U.S. dollars, and then selling those dollars in the open market to buy up Yuan, thereby supporting its value. So, while the headline reads as an attack on U.S. assets, it is also a sign of China's own domestic weakness—a desperate measure to defend its own financial stability by using its vast reserves.
Regardless of the primary motivation—be it strategic de-dollarization or tactical currency management—the timing and impact of the sale are profoundly significant. It comes at a moment of peak vulnerability for the U.S. dollar and the Treasury market. The dollar has been extending massive losses not because of China’s actions alone, but because the underlying fundamentals of the U.S. economy are deteriorating. Markets are increasingly pricing in a pivot from the Federal Reserve, anticipating that the "cracks" in the economy will force it to end its tightening cycle and begin cutting interest rates sooner rather than later. This expectation of lower future yields makes the dollar less attractive to foreign investors, causing it to weaken against other major currencies.
China’s sale acts as a powerful accelerant to this trend. The U.S. Treasury market is supposed to be the deepest, most liquid, and safest financial market in the world. It is the bedrock upon which the entire global financial system is built. When a major creditor like China becomes a conspicuous seller, it sends a powerful signal. It introduces a new source of supply into a market that is already struggling to absorb the massive amount of debt being issued by the U.S. government to fund its budget deficits. This creates a dangerous feedback loop. More supply of Treasuries puts downward pressure on their prices, which in turn pushes up their yields. Higher Treasury yields translate directly into higher borrowing costs for the entire U.S. economy, further squeezing households and businesses, deepening the economic slowdown, and increasing the pressure on the Fed to cut rates, which in turn further weakens the dollar. China’s action, therefore, pours fuel on the fire, eroding confidence in the very asset that is meant to be the ultimate safe haven.
The contagion from this dynamic—a weakening U.S. economy, a falling dollar, and an unstable Treasury market—will not be contained within American borders. The cracks will spread globally, creating a volatile and unpredictable environment for all nations. For emerging markets, the situation is a double-edged sword. A weaker dollar is traditionally a tailwind for these economies, as it reduces the burden of their dollar-denominated debts. However, this benefit is likely to be completely overshadowed by the collapse in global demand. As the U.S. and other major economies slow down, their demand for raw materials, manufactured goods, and services from the developing world will plummet, devastating the export-driven models of many emerging nations. They will find themselves caught between lower debt servicing costs and a collapse in their primary source of income.
For other developed economies like Europe and Japan, the consequences are more straightforwardly negative. A rapidly falling dollar means a rapidly rising Euro and Yen. This makes their exports more expensive and less competitive on the global market, acting as a significant drag on their own already fragile economies. The European Central Bank and the Bank of Japan will find themselves in an impossible position. If they cut interest rates to weaken their currencies and support their exporters, they risk re-igniting inflation. If they hold rates firm, they risk allowing their currencies to appreciate to levels that could push their economies into a deep recession. This currency turmoil, originating from the weakness in the U.S., effectively exports America’s economic problems to the rest of the world.
Furthermore, the instability in the U.S. Treasury market has profound implications for every financial institution on the planet. Central banks, commercial banks, pension funds, and insurance companies all hold U.S. Treasuries as their primary reserve asset. The assumption has always been that this asset is risk-free and its value is stable. The recent volatility and the high-profile selling by a major state actor challenge this core assumption. This forces a global repricing of risk. If the "risk-free" asset is no longer truly risk-free, then the premium required to hold any other, riskier asset—from corporate bonds to equities—must increase. This leads to a tightening of financial conditions globally, starving the world economy of credit and investment at the precise moment it is most needed.
In conclusion, the abrupt sale of $8.2 trillion in U.S. Treasuries by China is far more than a fleeting headline. It is a critical data point that illuminates the precarious state of the global economy. It is a manifestation of the Great Unwinding, a painful transition away from an era of limitless, debt-fueled demand and toward a new reality defined by excess supply, faltering consumption, and escalating geopolitical friction. The underlying cause of this instability is the deep imbalance created by years of policy missteps, which have left the world with a glut of goods and a mountain of debt. The weakening U.S. economy and the resulting slide in the dollar are the natural consequences of this imbalance. China’s actions serve as both a symptom of this weakness and a catalyst for a deeper crisis of confidence in the U.S.-centric financial system. The cracks are no longer hypothetical; they are appearing in the banking sector, in corporate credit markets, and now in the bedrock of the system itself—the U.S. Treasury market. The tremors from this shift will be felt broadly, ushering in a period of heightened volatility, economic pain, and a fundamental reordering of the global financial landscape.
DXY
GOLD - SHORT TO $2,800 (UPDATE)As expected last week Gold climbed into our 'Supply Zone' of $3,347 & rejected as I said it would on our video analysis. It even managed to close below our 'BOS' zone.
The game plan this week is to keep an eye on market structure for further sells. With every pump up we should be looking at how price can sell off again & how we can join the sell trend to profit off it.
DXY: Local Bullish Bias! Long!
My dear friends,
Today we will analyse DXY together☺️
The market is at an inflection zone and price has now reached an area around 96.706 where previous reversals or breakouts have occurred.And a price reaction that we are seeing on multiple timeframes here could signal the next move up so we can enter on confirmation, and target the next key level of 96.819.Stop-loss is recommended beyond the inflection zone.
❤️Sending you lots of Love and Hugs❤️
Bearish drop?US Dollar Index (DXY) has reacted off the pivot, which has been identified as a pullback resistance and could drop to the 1st support.
Pivot: 97.80
1st Support: 95.40
1st Resistance: 99.36
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Gold in a Shifting Macro Landscape Fundamentals First: Why is Gold Falling While DXY is Too?
Normally, gold and the U.S. dollar share an inverse relationship (which means, when DXY weakens, gold rises). But recently, this correlation has broken down, and that divergence is a loud macro signal.
What’s Happening:
Trade Deal Optimism:
Headlines suggest the U.S. is nearing a resolution with China and other partners. With reduced geopolitical tension, investors are reallocating from safe-haven assets like gold into risk-on trades like equities and crypto.
Iran-Israel Ceasefire:
The temporary cooling of conflict has revived risk appetite. Traders are rotating out of war hedges (like gold and oil) and into tech, growth, and EM plays.
Real Yields Still Elevated:
Despite a softening Fed narrative, U.S. real yields remain positive, keeping pressure on non-yielding assets like gold. The fact that gold couldn't rally even as the 10-year note softened post-Moody's downgrade could be telling.
My Perspective:
This is the first clear signal in months that geopolitical hedging may have peaked. When gold decouples from its safe-haven narrative despite macro uncertainty, that often precedes a structural rotation phase, especially if institutional flows favor equities.
Technical Breakdown
Gold has broken below its 50-day SMA at $3,322 and is trading in the lower third of its 3-month range. While the daily candles show increasing selling pressure, especially on lower highs (a sign of weakening bullish momentum)
RSI : Falling toward 40, with no bullish divergence yet.
Support Level : $3,176: Previous swing low
Resistance Level : $3,444: previous swing high
What This Move Might Be Telling Us
When gold sells off on dollar weakness and geopolitical calm, the market isn’t just relaxing. It is rotating. The de-grossing of gold-heavy hedges: Some hedge funds may be taking profit on gold-heavy exposure from Q1’s rally.
Rise of risk appetite despite cracks: Markets are forward-pricing trade peace and earnings resilience, possibly too early. Gold might not be in trouble, but it’s on the bench. Unless something reignites fear (e.g., Fed policy mistake, Middle East flashpoint, or economic shock), capital may stay elsewhere.
DXY 4hour TF - June 29th, 2025DXY 6/29/25
DXY Bearish Idea
All significant timeframes (monthly,weekly,daily 4hr) appear bearish for now.
Last week on June 25th, 2025 we saw price action break through our 98.000 zone confirming more bearish movement. This week we have two likely options that we will wait for confirmation on.
Bearish Continuation - Ideally we keep with the trend and look for lower highs below 98.000 for further confirmation. If we can spot rejection from this zone it is likely we will see DXY continue bearish for the week ahead.
Reversal - This is less likely but still possible. Price action could punch back through the 98.000 resistance and begin retesting previous highs. If this happens look for candlestick confirmation above 98.000 and expect a more bullish DXY for the week ahead.
Skeptic | Weekly Watchlist : DXY Triggers & Pro SetupsLast week, DXY played out our bearish scenario perfectly, breaking the short trigger at 98.530 and delivering a strong downward move . With Higher Wave Cycle (HWC) and Minor Wave Cycle (MWC) now bearish, I’m leaning heavier on short positions with tighter risk management. Let’s break it down with no FOMO, no hype, just reason. 📊
Daily Timeframe: The Big Picture
The key support at 98.801 was decisively broken, and we’ve confirmed below it—the major trend is now fully bearish. The next daily support lies at 96.478 , but I expect range-bound action early this week, especially after last week’s big move. Patience is key—let the market form a clear structure before jumping back in.
Key Insight: The bearish trend is locked in, but early-week consolidation is likely. Wait for the market to signal its next move.
4-Hour Timeframe: Long & Short Triggers
Zooming into the 4-hour chart, let’s pinpoint Low Wave Cycle (LWC) and triggers for long and short setups:
Short Trigger: Break below 4-hour support at 96.995 , confirmed by RSI re-entering oversold. Want to wield RSI like a pro? Check out my RSI Masterclass —it’s a game-changer! 😏
Long Trigger: Break above resistance at 98.215 . This is riskier since it’s against the bearish trend—set a wider stop-loss and take profits quickly. Why? HWC and MWC are bearish, so the first uptrend wave risks stop-loss hunts or fakeouts. I’ll drop an HWC/MWC/LWC guide soon to optimize entries, stops, and more—stay tuned!
Pro Tip: For longs, expect volatility in the first wave. Shorts align with the trend, so they’re the safer play—focus on 96.995.
Final Vibe Check
This Weekly Watchlist sets you up to trade smarter, not harder. DXY’s bearish momentum is our focus, but patience will unlock the best setups. I’ll keep you updated daily as markets evolve. Protect your capital—max 1%–2% risk per trade, no exceptions. Want the HWC/MWC/LWC guide or another pair? Drop it in the comments! If this watchlist sharpened your edge, hit that boost—it fuels my mission! 😊 Stay disciplined, fam! ✌️
💬 Let’s Talk!
Which setup are you eyeing this week? Share in the comments, and let’s crush it together!
“The Dollar Job: Break-In Strategy for 99+ Profits”💸 “DXY Heist Blueprint: Thieves’ Bullish Breakout Play” 🏴☠️
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🎯 THE MASTER HEIST PLAN:
🟢 ENTRY POINT – “Heist Entry Protocol”
🎯 Wait for price to break above Resistance @ 99.000 and candle to close ✅
💥 Plan A: Place Buy Stop Orders just above breakout
📥 Plan B: For Pullback Pros, use Buy Limit at recent swing low/high (15m–30m TF)
📌 Tip: Set alerts — don’t get caught napping while the vault opens! ⏰🔔
🛑 STOP LOSS – “Thief’s Escape Hatch”
🧠 Use 4H swing low at 98.100 as SL
⚖️ Adjust based on your lot size and number of open positions
🚨 Don't rush to set SL for Buy Stop entries before confirmation! Patience is part of the plan. 😎
🎯 TARGET – “Mission Objective”
💰 First Exit Target: 100.000
🏃♂️ Optional: Escape earlier near high-risk zones (Blue MA Line Trap Area)
⚔️ SCALPERS' CODE – Stay Sharp!
Only scalp on the Long side.
🔐 Use Trailing SL to guard your loot!
💸 Big wallets? Jump early.
🧠 Smaller stack? Follow the swing crew for coordinated execution.
🌐 MARKET OUTLOOK: WHY THE VAULT’S OPENING
💡 Currently seeing bullish momentum in the DXY
📈 Driven by macroeconomics, sentiment shifts, and intermarket pressure
📰 Want the full debrief? Check our analysis across:
COT Data
Geopolitics & News
Macro Trends & Sentiment
Fundamental Forces
📎🔗 See full breakdown
⚠️ TRADE MANAGEMENT ALERT
🚫 Avoid opening new trades during high-impact news
🔁 Always use Trailing Stops to lock in profits
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DXY Swing Short! Sell!
Hello,Traders!
DXY keeps falling down
And the index broke the
Key wide horizontal level
Around 97.800 which is now
A resistance and the breakout
Is confirmed so we are very
Bearish biased and we will
Be expecting a bearish
Continuation on Monday
Sell!
Comment and subscribe to help us grow!
Check out other forecasts below too!
Disclosure: I am part of Trade Nation's Influencer program and receive a monthly fee for using their TradingView charts in my analysis.
RSI Flashes Warning on EURUSD: Critical Level Under Watch!Good morning traders,
If the EURUSD pair breaks below the 1.16729 level due to an RSI divergence, the next potential target could be around 1.16093.
Keep in mind that a break below 1.16729 may also signal a potential trend reversal.
I've marked the pivot points for you on the chart for better clarity.
Additionally, it's crucial to keep an eye on current economic data and news releases as part of your fundamental analysis.
I meticulously prepare these analyses for you, and I sincerely appreciate your support through likes. Every like from you is my biggest motivation to continue sharing my analyses.
I’m truly grateful for each of you—love to all my followers💙💙💙
Elliott Wave Analysis for EUR/USD - Bullish OutlookPEPPERSTONE:EURUSD
This analysis is based on the application of Elliott Wave principles for the EUR/USD market on a weekly timeframe.
💡 Wave Identification:
Corrective Cycle (ABC): After a peak marked by wave B, the market completed a 5-wave downward structure (waves 1 to 5), forming wave C, signaling a possible end of the correction.
Potential Reversal Zone (2/B): The current point is a strategic level where a bullish rebound is anticipated.
📊 Projection:
A bullish impulse is expected from point C. The initial target lies in the 1.1140 - 1.1217 zone, corresponding to key resistance levels and Fibonacci projections.
🧠 Conclusion:
A breakout above 1.0440 could confirm a significant bullish impulse, suggesting buyers are regaining control.
⚠️ Disclaimer : This analysis is not financial advice. Always conduct your own research before investing.
DXY STRONG DOWNTREND CONTINUES|SHORT|
✅DXY is going down currently
In a strong downtrend and the index
Broke the key structure level of 98.000
Which is now a resistance,
And after the pullback
And retest, I think the price
Will go further down next week
SHORT🔥
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Disclosure: I am part of Trade Nation's Influencer program and receive a monthly fee for using their TradingView charts in my analysis.
Dollar Bullish Correction To $103 - $105While we expected to see some Dollar upside in Q2, the economy was in such a bad state that the Dollar could not hold its value. Since the start of 2025 the Dollar is down 12% and this is only the beginning.
I believe we will see more downside in the future. But for the coming quarter there is a chance for the Dollar to get some breathing space & recover in the short term. Overall, the trend of the Dollar remains bearish, so what we want to keep an eye on is small pumps (short term recovery) into price zones which will allow us to short the Dollar back down.
I want to see a dip lower towards $96 - $94 before sellers lose bearish momentum. If this move takes place, then we can slowly see buyers step back into the market & start pushing back to the upside. Once price hits our ‘Supply Zone’ of $103 again, it’ll give us a more clear indication of what the Dollar will do next; whether that’s a longer term uptrend or a continuation to the downside.
GOLD - SHORT TO $2,800 (UPDATE)Our original sell bias from $3,347 which I posted live for you all, is now running in deep profits! Market is now down & running 810 PIPS in profit in just 2 days.
We have broken structure to the downside, crossing below our previous 'Wave E' low, indicating & acting as stronger confluence that Gold will carry on down towards our $2,800 target. Huge profits en-route for us all in this free channel.
Make Dollar Great AgainDXY Big Picture
While looking at other DXY charts to use a clean chart for HTF, I saw that it touched historical trend support. It didn't touch only on the TVC chart, so I am adding it with the other charts and accepting that it touched the trend.
According to the fractal I added in August last year, the price is moving very well.
I expect a correction from these areas. I think we have reached the reversal areas due to both the momentum in the declines and the oversold.
The decline fatigue I mentioned is more evident in LTF charts. The price cannot reach the EQ zone of the decline channel that has been going on since February on the daily chart. Although it is a very inclined channel on the 4h chart, it can no longer reach the channel bottom. For this reason, I think this region is where reversal should be sought. After the first 0.38 of this decline, I think a pullback to 0.5 is possible.
WHAT IS THE EXPECTED RETURN and DURATION of this GOLD Bull Run?Well, when measured against the DXY index, a clear trend becomes apparent.
A Golden Bull typically lasts about 40 quarters, which is essentially 1 decade (give or take a quarter).
Similar to #Bitcoin and its cyclical bull markets within a larger secular bull, the returns tend to decrease over time.
However, it seems that a triple-digit Gold price relative to the DXY is on the horizon at the very least.
What would that look like if the DXY were to hit a new low around 69? This would suggest a Gold price of $6900 at a ratio of 100:1.
A Gold price of $12K with a DXY of 80 only requires a ratio of 150...
Thus, a five-digit Gold price is certainly within the realm of possibility.
I have forecasts that extend as high as $12K.
GOLD - SELL TO $3,288 (1H VIEW)Still looking for a move lower into the $2,787 - $3,276 zone, to take out the June low, like I mentioned to you all a few days ago.
Tomorrow is Friday so be careful as price action could be choppy & use strict risk management.
⭕️Imbalance Left Below $3,300 Psychological Number.
⭕️Either Wave 2 or Wave C Not Complete of Major Impulse Move Down.
⭕️Sellers Holding Below Resistance Zone.
TP: $3,288