Another 48h - Today's High Lower As Last 2 Day Highs In The DXY

2024/12/17
Another 48h - Today's High Lower As Last 2 Day Highs In The DXY
“no big price action on tuesday before the fed rate cut on wednesday!
will our small fine uptrend channel hold until then? and after that too?”



Europe's stock markets faced headwinds from the US stock exchanges in late trading this Tuesday, December 17th, 2024 - after they opened. Before the US Federal Reserve's interest rate decision, which will dominate the agenda on Wednesday, traders and/or investors avoided the risk. The day after Tomorrow, next Thursday there will be further interest rate decisions in Great Britain, Sweden and Norway. After initial losses, the EURO50 fought its way back moderately into the profit zone over long stretches, but the weakness on the trend-setting New York stock exchanges pushed it slightly into the red by -0.09% to 4942.58 points in late trading. So the EURO50 continued its weak start to the week. While our German stock market is coming under some pressure in today's trading following mixed German economic data. is. The DAX closed -0.33% in the red at 20,246.37 points after reaching a record all time high on Friday. Outside the Eurozone, the SMIC stood out positively. It ended trading +0.33% higher at 11,740.52 points. The British UKX , on the other hand, fell by -0.81% to 8,195.20 points. In London, traders and investors said they had scaled back their bets on interest rate cuts from the Bank of England after British wage growth accelerated for the first time in over a year. Another event also seems to be casting its shadow ahead; namely the big expiry date on the futures exchanges, on Friday, December 20th, 2024. Until then, the professional traders and/or investors will try to move the prices in the favored price action paths, which, as always, every 3 months, will (not) lead to volatile price actions.

• 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.

“Economic theory is devoted to the study of equilibrium positions. The concept of equilibrium is very useful. It allows us to focus on the final outcome rather than the process that leads up to it. But the concept is also very deceptive. It has the aura of something empirical: since the adjustment process is supposed to lead to an equilibrium, an equilibrium position seems somehow implicit in our observations. That is not true. Equilibrium itself has rarely been observed in real life — market prices have a notorious habit of fluctuating.”
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 is today
on Tuesday, the 17th December 2024 at 106.934 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? Nothing new ahead of the FED decision tomorrow. As has been aptly described since the weekend, the price action is moving more or less within our uptrend channel. Even if it sounds annoying and boring? It is like it is! I still think that everything is more or less priced into the price action (fed rate cut of -0.25%). And we will still see a stronger DXY until the end of this week. After the ECB cut its interest rate last week and the FED followed suit this week, the picture remains that the US dollar is the cleaner of the two shirts (the Euro shirt); if I can write it like that. Perhaps this is also the reason for the last few days, even last week also, why the price action went up, after the trend was rather bearish for two weeks? That's why I expect that 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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