DXY going downDXY is ready for a leg down, after bear div and topping within projected time on Daily. On 4H it's building up to a nice #SBS shape, where we can expect a move down. 4H time projection says downwards into start of, or mid, February.
DXY trade ideas
Direction of the DXY for this week Direction of the DXY for this week
seems like an up trend will need to fill up FVG up there
at the opening of the market DXY will go down but for the long term will go up ....
DXY POTENTIAL BUY OPPORTUNITY!DXY (US dollar index) May continue to wax stronger! From the technical standpoint, we can see how price formed a double button and successfully broke the neckline. This is an insight that buyers are likely to dominate the market and trade a new high! Coming week we anticipate retail sales report and Fed rate cuts. It’s good we stay informed and plan accordingly for the week!
DXY STILL BEARISH AFThis move up these past few day is just to clear liquidity as SMC traders will say; to retest the neckline of the head and shoulder as some others will say; to retest the 50% fib; to return to discount level etc.
The point is... it is going down and to get an entry, you have to see it before it prints and that's what I'm here to show you.
The only thing that can go wrong is that it may shake out early sellers by taking out 106.8 again but I dont think it's likely, but be open to it. I'm already in...
Market Year Wrap With Gary Thomson: 2024 Market Insights & 2025 Market Year Wrap With Gary Thomson: 2024 Market Insights & 2025 Outlook
As we approach the close of 2024, it’s time to reflect on results and think of potential opportunities for the year ahead. Join Gary Thomson, the COO of FXOpen UK, as he sums up the key market trends that shaped 2024 and provides insights on what to expect in 2025.
- Inflation and Interest Rates
- Forex Market Trends
- Commodity Markets
- Stock Market Highlights
- 2025 Outlook
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DXY FORECASTIn this analysis we are focusing on 1H time frame for finding the upcoming moves and changes in DXY price. Here I'm using base and trendline strategy along with price action. Let's see what happens and which opportunity market will give us.
Always use stoploss for your trade.
Always use proper money management and proper risk to reward ratio.
This is just my analyze or prediction.
#DXY 1H Technical Analysis Expected Move.
Dollar Index (DXY): Very Bullish Sentiment
Dollar Index completed a consolidation, violating
a resistance of a wide horizontal range on a daily.
It opens a potential for more growth.
The market may keep rising, at least to 107.45
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check the trendIt is expected that a trend change will form within the current resistance range and we will witness the beginning of a downward trend. By passing the resistance range, the upward trend will likely continue
DXY- Will it continue up into year's end?December is usually a bearish month for the USD. However, this time, the situation could be different. The USD seems well-supported by fundamentals, and the technicals are looking bullish.
Looking at the 4-hour chart, we can see that after the local high at 108, the index started to fall and broke below the support from the April-May highs (old resistance). However, after hitting a low at the 105.50 zone, the USD Index reversed, breaking above the falling trendline of the corrective falling wedge and also reclaiming the 106.40 resistance.
At this moment, there is a high chance of upward continuation, and as long as the 106–106.40 zone remains intact, the outlook remains valid.
DXY on the rise.DXY has completed its Wyckoff Accumulation and is headed higher.
The DXY strengthening supports shorts on XX/USD pairs.
DXY Will Go Down From Resistance! Short!
Please, check our technical outlook for DXY.
Time Frame: 9h
Current Trend: Bearish
Sentiment: Overbought (based on 7-period RSI)
Forecast: Bearish
The market is on a crucial zone of supply 106.563.
The above-mentioned technicals clearly indicate the dominance of sellers on the market. I recommend shorting the instrument, aiming at 105.718 level.
P.S
Overbought describes a period of time where there has been a significant and consistent upward move in price over a period of time without much pullback.
Like and subscribe and comment my ideas if you enjoy them!
The US Dollar Index (DXY) is currently trading around 106.70. The US Dollar Index (DXY) is currently trading around 106.70. On the 4-hour chart, DXY is testing a resistance TVC:DXY zone near 107.00–107.13, which aligns with the 61.8% Fibonacci retracement of a prior move. If this level is breached, the next target could be 107.50 or higher, signaling a continuation of the uptrend. However, failure to break above this resistance could result in a pullback, with support seen at 106.10, followed by the 105.63–105.78 range.
In summary, DXY is at a critical juncture. A breakout above its resistance would likely fuel further bullish momentum, while a rejection may see it revert to lower support levels.
What Is Quantitative Tightening and How Does It Work?What Is Quantitative Tightening and How Does It Work in Financial Markets?
Quantitative tightening (QT) is a critical tool central banks use to control inflation by reducing the money supply. In this article, we’ll break down how QT works, its impact on financial markets, and how it influences the broader economy. Read on to learn more about the effects of QT and how it shapes markets.
What Is Quantitative Tightening?
Quantitative tightening (QT) is a type of tightening monetary policy that central banks use to reduce the amount of money circulating in the economy.
When central banks like the USA’s Federal Reserve or European Central Bank engage in QT, they aim to tighten liquidity by reducing their balance sheets, typically by allowing bonds or other financial assets to mature without reinvestment or selling them outright. QT is a practice often used alongside hiking central bank interest rates, though not always.
The main goal of QT is to manage inflation by increasing borrowing costs and reducing demand for goods and services. By letting bonds mature or selling them, central banks effectively pull money out of circulation. This leads to fewer funds available for lending, which raises interest rates.
Higher rates make borrowing more expensive, encouraging businesses and consumers to cut back on spending, which can help cool down inflation. An example of this mechanism in action is the Fed’s QT program that began in 2022 to tackle high inflation by reducing the size of its balance sheet after years of quantitative easing.
QT is essentially the opposite of quantitative easing (QE), which is aimed at stimulating economic growth.
What Is Quantitative Easing?
QT and QE are both used to correct the economy’s course. However, while QT refers to the tightening of monetary policy, QE loosens it. During QE, central banks buy large quantities of government bonds and other assets to inject liquidity into the economy. This increases the money supply, lowers interest rates, and is intended to stimulate economic activity, particularly during downturns or recessions. QE was used extensively following the 2008 financial crisis and during the COVID-19 pandemic as a way to support economic recovery.
How Does Quantitative Tightening Work?
Quantitative tightening works by pulling liquidity out of the financial system, reducing the amount of money available for borrowing and investment. Central banks use a couple of specific methods to achieve this, which have a ripple effect on markets and the broader economy.
1. Reducing Asset Holdings
One of the most common ways central banks implement QT is by allowing bonds and other financial assets on their balance sheets to mature without reinvesting the proceeds. For example, the Federal Reserve might hold trillions in government bonds. When those bonds mature, instead of using the proceeds to buy new bonds, the Fed simply lets the money flow out of circulation. This reduces the central bank’s balance sheet and shrinks the money supply, contributing to higher borrowing costs.
2. Selling Bonds
Another method central banks use is the outright sale of government bonds or other securities. By selling assets, central banks increase the supply of bonds in the market. This can push bond prices down and drive yields higher, which makes borrowing more expensive for companies, governments, and individuals alike. Rising bond yields often lead to higher interest rates across the board, from mortgages to business loans—when there’s less money available for lending, banks raise the rates they charge for loans.
Effects of Quantitative Tightening on the Broader Economy
Quantitative tightening has significant ripple effects across the broader economy. As central banks reduce liquidity, it impacts everything from borrowing costs to consumer spending and business investment.
1. Higher Borrowing Costs
One of the most immediate effects of QT is the rise in interest rates. As central banks shrink their balance sheets, bond prices fall, pushing yields higher. This, in turn, raises the cost of borrowing for businesses and consumers. There may also be interest rate hikes alongside QT, further tightening lending conditions.
Mortgages, personal loans, and corporate debt all become more expensive, discouraging borrowing. For businesses, higher financing costs can limit expansion plans, reducing investment in growth or innovation. Households, meanwhile, face elevated mortgage rates, leading to reduced demand in housing markets and potentially lower home prices.
2. Reduced Consumer Spending
As the cost of borrowing rises, consumers have less disposable income. Higher interest rates on loans and credit cards mean households spend more on servicing debt and less on goods and services. This can slow down retail sales and reduce overall consumer demand, which is a critical driver of economic growth. Lower consumer spending typically affects sectors like retail, real estate, and manufacturing, which depend on a high volume of transactions.
3. Slower Business Growth
QT also impacts businesses by making it more expensive to access credit. Companies that rely on borrowing to finance operations, new projects, or expansions find it harder to justify taking on debt. With higher interest payments eating into profits, many businesses may delay or scale back investment plans. In addition, small and medium-sized enterprises (SMEs) that depend on bank loans for cash flow are often the hardest hit.
4. Inflation Control
While QT can slow economic activity, its primary goal is to rein in inflation. By reducing the money supply and making credit more expensive, it cools down demand. Lower consumer and business spending can reduce price pressures, helping to stabilise inflation. This was a key objective when the Federal Reserve resumed QT in 2022 to counter post-pandemic inflation.
5. Potential Economic Slowdown
However, if QT is too aggressive, it risks triggering an economic slowdown or even a recession. Tightening financial conditions leads to reduced economic growth, as seen in 2018 when markets reacted negatively to the Federal Reserve’s balance sheet reductions.
How Does Quantitative Tightening Affect Financial Markets?
Quantitative tightening can have significant effects across different financial markets. By reducing liquidity, it influences the behaviour of key assets, from bonds to equities, and can reshape market conditions in profound ways.
1. Bond Market
QT often leads to higher bond yields. When central banks like the Federal Reserve reduce their bond holdings or stop reinvesting in new ones, the supply of bonds in the market increases. As bond prices drop, yields rise to attract new buyers. This rise in yields means governments and corporations face higher borrowing costs. For instance, during the Federal Reserve’s quantitative tightening efforts in 2018, US Treasury yields rose significantly as more bonds became available in the market.
2. Stock Market
Equity markets often react negatively to QT. As liquidity tightens, the cost of borrowing rises for businesses, which can squeeze corporate profits and reduce their ability to invest or expand. Investors also tend to move away from riskier assets like stocks when bonds offer higher yields, as bonds become more attractive for their safety and improved returns. In 2018, US stocks experienced heightened volatility when the Fed’s quantitative tightening efforts combined with rate hikes led to market corrections.
3. Foreign Exchange Market
QT can also impact currency values. As central banks tighten monetary conditions and raise interest rates, their currencies often strengthen relative to others. This is because higher yields and interest rates attract foreign investment, increasing demand for the currency. For example, when the Fed began QT in 2022, the US dollar strengthened as investors sought better returns on US assets like Treasury bonds. See how the US dollar strengthening occurred for yourself in FXOpen’s free TickTrader trading platform.
4. Credit Market
QT reduces the availability of credit as banks and financial institutions face higher borrowing costs themselves. As liquidity is drained from the system, lenders tighten their credit conditions, making loans more expensive and harder to get. This can slow economic growth as businesses and consumers find it more costly to finance investments or purchases.
In effect, QT creates a tighter financial environment by reducing liquidity, pushing up borrowing costs, and shifting investor behaviour across various markets. Each asset class feels the impact in different ways, but the overall effect is a more cautious, less liquid financial system.
The Bottom Line
Quantitative tightening is a powerful tool central banks use to manage inflation by reducing liquidity and increasing interest rates. While it helps control rising prices, QT can impact borrowing costs, investment, and market stability. Understanding how these mechanisms work is crucial for informed trading.
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FAQ
What Is Quantitative Tightening?
The quantitative tightening definition refers to a monetary policy used by central banks to reduce liquidity in the economy. This involves decreasing the central bank’s balance sheet by selling bonds or allowing them to mature without reinvestment. QT is typically aimed at curbing inflation by raising borrowing costs and slowing economic activity.
How Does Quantitative Tightening Work?
QT works by reducing the supply of money in the financial system. Central banks achieve this by selling government bonds or letting them mature. As the bonds leave the market, interest rates rise, making borrowing more expensive for businesses and consumers.
How Does Quantitative Tightening Affect the Stock Market?
QT can negatively impact stock markets. As interest rates rise and liquidity tightens, borrowing costs for companies increase, which can hurt corporate profits. Investors may shift towards so-called safer assets like bonds, reducing demand for stocks and contributing to market volatility.
What Is the Difference Between QT and QE?
Quantitative easing (QE) increases the money supply by buying bonds, while quantitative tightening (QT) reduces liquidity by selling bonds or letting them mature. The main difference between quantitative easing vs tightening is that QE stimulates economic growth, while QT aims to control inflation.
What Does It Mean When the Fed Is Tightening?
When the Federal Reserve tightens, it implements policies to reduce money supply and raise interest rates. This helps control inflation by making borrowing more expensive and slowing economic activity.
This article represents the opinion of the Companies operating under the FXOpen brand only. It is not to be construed as an offer, solicitation, or recommendation with respect to products and services provided by the Companies operating under the FXOpen brand, nor is it to be considered financial advice.
correctionIt is expected that the correction trend will form up to the specified support levels, then there will be a possibility of a trend change.
If the index crosses the 78.6% level, the continuation of the downward trend will be likely
DXY Happy New Year Analysis Hey guys, this will be my last analysis for the year. I hope you all get some rest and reflection. The markets aren't that great during this period, so don't put yourself at a disadvantage. Go spend time with your family and friends, go have fun, go get ready to dominate the coming year.
Merry Xmas and a happy new year!
- R2F Trading
The Best Phase of the Trend: The Expansion PhaseBeing a successful trader requires the ability to identify the phase of the trend with the highest probability of success.
The best opportunities arise during the expansion phase, where the prevailing trend resumes, pushing the market to new highs or lows.
This phase is characterized by swift, decisive market moves with minimal pullbacks, aligning strongly with the overall trend.
My Trading Steps:
1. Define the Primary Trend on the Daily
Identify the dominant trend (uptrend or downtrend) to establish the broader market context.
2. Look for a Countertrend on H4/H1
Spot corrections or pullbacks against the primary trend, signaling potential setups.
3. Find a Trigger Candle
Watch for a Marubozu-like candle at the zone of the countertrend line break or the last clean, untested breakdown.
4. Exit Rules
Exit the position if the price closes below the trigger line.
5. Take Profits
Target key Fibonacci levels and significant support/resistance zones. a countertrend on H4/H1
This is an 80% Setup: Targeting Fibo 138.2
The strategy has an 80% success rate when the target is set to the Fibonacci 138.2 level, calculated from the closing prices of the correction.
This precise targeting aligns with the expansion phase of the trend, ensuring high-probability entries and exits while maximizing potential profits.
———
We may not know what will happen, but we can prepare ourselves to respond effectively to whatever unfolds.
Stay grounded, stay present. 🏄🏼♂️
Your comments and support are appreciated! 👊🏼
DXY Trading JournalDXY Trading Journal
Dec 24
Price is delivering in a Premium. I suspect that Price will seek the 50% level and rebalance the 15FVG. Price should react at that level and rally seeking higher prices.
Potentially rebalancing the higher FVG for the high?
Quick Analysis Just before Christmas Hey there,
So, I though of doing a quick market review just before Christmas, hoping to bring some extra insight into whats happening in the markets this week.
Also note that this is but just my opinion and my view of the markets, it should in no way be used or interpreted as advice or signals, but rather as a reference and a soundboard.
Furthermore, I wish you all a happy, blessed and merry Christmas and a successful and profitable new year.
Dollar Bias for Christmas weekEverything is clear in the chart.Low volatility long vacations but mindful to play.
idea on a chart US Dollar (USD) continues to trade near its 2-year highs. Dollar Index (DXY) was last seen at 108.23, OCBC’s FX analysts Christopher Wong notes.
USD continues to trade near its 2-year high
“Daily momentum is mild bullish while RSI rose into overbought conditions. Resistance at 108.50, 109 levels. Support at 107.20, 106.70 (21 DMA). Day ahead watch US data – core PCE, personal income/spending and Uni of Michigan sentiment. Market liquidity is increasingly thinner and fluid pricing can exacerbate FX moves. A softer than expected print may provide a breather for risk proxies and tame USD bulls.”
USD$ is set to rise. On Monday I said the opposite: Falling
I stand corrected on what I published last Monday right before the Asia session, I think a rushed analysis and when you see what you want to see in a chart to support an idea, it can all go wrong. Or did the USD$ have such a bullish week to turn the charts around in such a short space of time.
I don't know but both the Daily and Weekly chart of the USDX have a very bullish W/Bottom. For those who don't know these patterns, they are basically a double/bottom or bottom1 & a bottom 2 and a W is formed as price is written up to a Neckline which is the yellow lines on the daily and weekly charts here.
I initially thought and stated that the USD$ may run up to 1.11 /1.12 and from a technical standpoint of these W/bottoms that is exactly where price may end up. But lots can happen in the meantime.
Briefly on Gold and Silver:
The Gold price has turned around bullishly after turning down in a Double/Top for many days. This turnaround also coincides with the bottom trend-line which is also the bottom line of a Triangle formation on the daily. Next trading day I would expect Gold to continue to climb for a couple of sessions before turning back down to the trend line and bottom of Daily-triangle which is all but complete and price would then either breakdown or breakout from triangle. I think that despite the USD$ continuing to climb, the Gold price will do the same thing and climb but probably won't go to an ATH just yet.
Silver has a bearish Head n Shoulders on the Daily. Price will retest the sell area next session on the daily which means the Silver price will get a false Long rally and selling will resume into the daily H n S pattern. The Silver price is right on the daily 200ema and back in January and February 2024 price got a little below the 200ema and then took off on a Long rally. Same thing expected, the HnS will play out and price will fall back a little more and then a buying spree and rally upwards will commence in Silver, possible just before the New Year.
DXY helping out the VIX Here this great Liquidity Sentiment Indicator, help us grab some festive season before the holiday break!
Long dxyCurrently believed that dxy is or has started a wave 5 impulse to new highs.
I believe that this will cause corrections across stock and crypto markets, potentially for next two years.
Bitcoin may have toped, I, a, looking for a pull back to low 70 this next 12months being a A wave on a large scale corrections, with a push up before failure and settling around 40k regions before a few impulse out to 180k.
I will monitor for sideways accumulation around 45-40k.
This is my current bearish plan 21.12.2024
