Weekly report: DXY (Short)
Updated
The price end the week with a fake breakout that can be clearly watched in the weekly chart, so the price could take a strong move to the upper area of the channel or keep slow movement to upside until the price crash to the downside.
What to take on consideration:
On the fundamental side: The last week the Fed says no more hikes ahead this year, however the market expect at least one more cut this year, according to the CME Fedwatch tool, which one expect for a cut in the fed rates for the next semester, this behavior is explained because the yield curved inverted showed up on friday, creating expectation for a sooner recession on the US economy.
In the week ahead we need to take on consideration the Consumer Confidence data on US on tuesday, ECB president Draghi Speaks on wednesday, Final GDP q/q on thursday and the expectation for this week to the US-China trade deal
On the tecnical side: the price tried to break the lower part of the channel, but the price quickly recover and close the week inside the channel with a big tail in the weekly chart, forming a doji hammer in the price action language, showing indesicion in the market but with bullish signals. The price remind in the channnel so we can expect the price touch the upper parte of the channel yet, but with the expecation to be just the part "B" of the expanded flat drawed of the retracement process.
So in the midterm we keep the odds in the Short Position.
What to take on consideration:
On the fundamental side: The last week the Fed says no more hikes ahead this year, however the market expect at least one more cut this year, according to the CME Fedwatch tool, which one expect for a cut in the fed rates for the next semester, this behavior is explained because the yield curved inverted showed up on friday, creating expectation for a sooner recession on the US economy.
In the week ahead we need to take on consideration the Consumer Confidence data on US on tuesday, ECB president Draghi Speaks on wednesday, Final GDP q/q on thursday and the expectation for this week to the US-China trade deal
On the tecnical side: the price tried to break the lower part of the channel, but the price quickly recover and close the week inside the channel with a big tail in the weekly chart, forming a doji hammer in the price action language, showing indesicion in the market but with bullish signals. The price remind in the channnel so we can expect the price touch the upper parte of the channel yet, but with the expecation to be just the part "B" of the expanded flat drawed of the retracement process.
So in the midterm we keep the odds in the Short Position.
Note
Sources: cnbc.com/2019/03/25/bond-market-says-a-recession-is-coming-and-the-fed-will-cut-rates.html
cnbc.com/2019/03/21/a-key-recession-indicator-just-did-something-that-hasnt-happened-in-12-years.html
cnbc.com/2019/03/20/fed-leaves-rates-unchanged.html?&qsearchterm=jeff cox
forexfactory.com/calendar.php
cmegroup.com/trading/interest-rates/countdown-to-fomc.html
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