Another 48h - Weak EURUSD Sends DXY On A Recovery Week

2024/12/15
Another 48h - Weak EURUSD Sends DXY On A Recovery Week
“our uptrend channel seems to be delivering what it promises!
also on this wednesday during the us interest rate decision?”



If you deal with forex professionally, you can't ignore politics.
Depending on which currencies are in focus - like in our case the DXY . And so I don't want to and can't ignore the fact that Arab states are calling for a peaceful transition in Syria, that Hezbollah seems to be without supplies from Iran after the overthrow of Syria, and that Zelensky is also drawing the world's attention to the fact that North Koreans are at Kursk battle. And what does all this have to do with the DXY ? Trump back in office 2025! And everything I perceive from Germany with the help of the Internet and satellite TV, the last US President (until January 2021) and/or the next US President (from January 2025) seems to have learned their political lessons in the last 4 years. He seems serious - and that's a good thing! Trump recently threatened, for example, with punitive tariffs for China. Nevertheless, US President-elect Donald Trump is said to have invited Chinese President Xi Jinping to Washington. Trump's spokeswoman Karoline Leavitt announced this in an interview with the television channel Fox News, confirming corresponding reports from several US media outlets. “This is an example of President Trump having an open dialogue with leaders of countries that are not only our allies, but also our adversaries and competitors,” Leavitt said in support. When asked, she left it open whether Xi had accepted the invitation and actually planned to travel to the US capitol Washington for the ceremony on January 20th. Heads of state and government from other countries were also invited, Leavitt said, without giving details. “We’ll see who shows up.” But most consider it unlikely that Xi will actually attend the event. Because that would probably be too much of a good thing, too good to be true”, if you ask me - but ”hope dies in the end, as we colloquially say here in Germany.

• Will the bulls recapture the terrain above 106.517 points again?
  
• Will the bears recapture the terrain under 104.447 points again?

That's what we wanted to learn last week, based on the price action in DXY . And we saw that the DXY actually closed at 106.945 points last Friday, December 13th, 2024 - even above the price action of 106.517 points. The price action is therefore again above the 1st annual year high, from 2024/04/16, at even 106.517 points. However, it is still below the terrain of the annual high of 2023, with 107.348 points, from 2023/10/03 and/or also the annual high of 2024, with 108.071 points, from 2024/11/22. Which is fundamentally bullish - as long as the price action can be defended by the US bulls above 106.517 points.

“My main concern is with the world order”
George Soros

• Will the bulls defend the terrain above 106.517 points this week?
  
• Or will the price action fall back to the Dec`24 low at 105.420 points?

The low is crucial because it is more or less also the intraday high from November 6th, 2024 at 105.441 points when Trump was re-elected. So, in the case of higher price action, we can de facto argue that the DXY has been rising since Trump's re-election. And we will find out this week, if the bulls defend the recaptured price action of 106.517 points from last week, i.e. the 1st Annual Year High 2024, from 2024/04/16, whether the bullish trend in the DXY will continue? Which is what I tend to assume, even if the price action stays above 106.517 points!


The last price action of the DXY was
on friday, the 13th december 2024 closed with 106.945 points.
This calendar week, everything is in the shadow of the Fed's interest rate cut, which is expected by most. If the Fed doesn't lower its interest rates by -0.25%, would that be a big surprise on the financial market, which could trigger an earthquake? But this cannot be assumed! However, I want and can only repeat myself - in the case of the DXY - as I wrote yesterday. In the case of the price action of the DXY I still think that everything is more or less priced into the price action (fed rate cut of -0.25%). Perhaps this is also the reason for the last few days of rising prices, after the trend was rather bearish for two weeks? And we are likely to experience price action in our small but fine upward trend channel in this calendar week. Important facts are that the uptrend started on Thursday, December 5th, 2024, and was confirmed the following Friday, December 6th, 2024, when the price action briefly broke down at the hour of the publication of the latest US unemployment rate. However, in the hour that followed, the price action returned back into our small, fine uptrend channel when the UNI Michigan consumer confidence was published. So that at the beginning of the week last week, the two-week downward trend line in the DXY at 106,214 points and/or 106.40 points was left behind by the US bulls. Which is why this small, fine uptrend channel is so important, because it confirms the breakout from the downtrend, as long as the price action within the uptrend channel is sent by the traders and/or investors. and that's what the price action is currently doing.


With best wishes
and with good intentions!
Aaron



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