A clear change in sentiment on the USD. Short, then Long.
Updated
My DXY view for this first Q of 2024.
FUNDAMENTALS:
We started with a clear shift of sentiment this year. Last two months of 2023, market rapidly priced rate cuts into the usd dollar, expecting cuts as early as March also J. Powell gave the most dovish speech in his career in the hopes that inflation will slow down faster than expected an attemp to save banks and give them breathing room. On the other hand all the late data has been beats up from the US market, NFP, Job Claims, ADP, CPI, everything has been green and beyon expectation, giving the market to think if the current cut pricing (given to the usd in the last days has been correct).
This is what we have been seen in the start of 2024, market overpriced cuts in the market an every indicator is giving clues that rates are not coming that fast.
TECHNICALS:
Dollar created a strong impulse after reaching 0.88 fib retracement in the weekly chart which is still bullish.
This momentum ended in the creation of a HH in the 4H and daily timeframe.
This strong response aligns with the idea that dollar was under priced due to possible cuts.
VIEW:
From this point I expect next week to be a bearish one for the DXY till thursday, friday with personal income and expenditure will give a breathing room for dxy to test previous high zones and clear more liquidity. After that going into FOMC, the FED will not cut in JAN, giving another bullish impulse to break another HH in the 4H and Daily in the next zone around 104.500
FUNDAMENTALS:
We started with a clear shift of sentiment this year. Last two months of 2023, market rapidly priced rate cuts into the usd dollar, expecting cuts as early as March also J. Powell gave the most dovish speech in his career in the hopes that inflation will slow down faster than expected an attemp to save banks and give them breathing room. On the other hand all the late data has been beats up from the US market, NFP, Job Claims, ADP, CPI, everything has been green and beyon expectation, giving the market to think if the current cut pricing (given to the usd in the last days has been correct).
This is what we have been seen in the start of 2024, market overpriced cuts in the market an every indicator is giving clues that rates are not coming that fast.
TECHNICALS:
Dollar created a strong impulse after reaching 0.88 fib retracement in the weekly chart which is still bullish.
This momentum ended in the creation of a HH in the 4H and daily timeframe.
This strong response aligns with the idea that dollar was under priced due to possible cuts.
VIEW:
From this point I expect next week to be a bearish one for the DXY till thursday, friday with personal income and expenditure will give a breathing room for dxy to test previous high zones and clear more liquidity. After that going into FOMC, the FED will not cut in JAN, giving another bullish impulse to break another HH in the 4H and Daily in the next zone around 104.500
Note
EURUSD For this next week:
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