US Dollar INDEX studyUS Dollar INDEX study - This is in addition to the weekly chart study I published on July 30 (Link given below)
J-DXY
Dollar Index study - DXY pullback and possible directionDollar Index study - DXY pullback and possible direction
Contra Trade: Short the Dollar Index at CMP 92.7, SL93.5 ,TGT 91So Dollar Index has met with its old friend - a downtrendline - after a long time. We can expect an interim fall in the index from current levels of 92.7 to levels of around 91.
Its a contra position to market sentiments, hence extreme caution is adviced, however the gains will be sweet!
The RSI is also dropping from overbought levels to 68 levels, look poised to cool down further.
DXY will turn into bullish if head and shoulder bottom formedYou can see two head&shoulder in the chart. For the frist pattern, it's the beginning bearlish trend of DXY.
Now, the price is out of the decline channnel,it means that the decline trend has already change ! And the MACD is above the 0 zone.
If the head&shoulder bottom is formed ( it has not been formed yet!), the trend of USD will competely change! 94.25 will be the key point!
Dollar Index Weekly Supports proved to be quite determined in producing a strong recovery. However the rally now has tread into median line resistance and this could now hold back further strengthening next week and push the DX into a range until 94.30 is surpassed.
DXY how beautifully reached symmetrical traingle targetJust to put in a prospective, following traditional technical analysis can lead to good trades and necessarily no need to trade every other day. It is question to be asked if fundamental make the technical or fundamental can be predicted by the technical. Nevertheless it is always to good to have both technical and fundamental knowledge in your trading arsenal.
DOLLAR INDEX WSigns of troubled times ahead for the Dollar. After holding on to critical levels around 92 for a while the recent decline persisted to drag the currency basket lower and trigger the immediate support levels around 92. What we are seeing now is a decline that has been persisting and has maintained a vice like grip on the recovery. The charts show that the prices could at the maximum react to the median line beyond which it looks challenging to sustain. Thereby triggering a collapse everytime we see a rally towards 93 levels. This level coincides with the previous recovery point this leading us to maintain a bearish bias for the coming few days.
The lower channel is at 87 which is at a distance and could attract the prices if the underlying bearishness persists.
DXY TNX spreadThe USD would ususally move according to the USD strength i.e. DXY.
Lately, it hasn't been the case.
There could be multiple theories around it..from fundamental to political to technical.
I am wondering what gives!
One plausible explanation is may be the Fed policy has gone beyond what's needed. But then again, it's pretty much set in stone now!
Is it a coincidence that this is happening around G20 and North Korea missile launch?
Or may be Fed has something to do with it? But then again..Fed is never really out of the news. They are taking backseat most in last 10 years though. And it's good.
So what gives? Is it Trump? He alienated Yellen and now she has made sure that the policy won't change even if she is removed.
That fiscal stimulus better be coming soon.
Gold : More of Chakravuyh than Arjuna's Arrow !Our long pending analysis and the most sought analysis is Gold. True, people are worried at uncertain times and economic scenario's around them, so they want to analyse whether Gold will be safe security for part of their investments. Before we go into analyzing the Xauusd, Be clear about the fact we are building a case with our analysis like Chakravuya considering various economic factors, its not a straight arrow from Arjuna aimed at Bird's Eye. So we are analyzing with Global scenario's,News Events, Fed rate hikes etc.
What do we see in the chart above ? Broadening Wedge Ascending Pattern which usually breaks to downside, rarely it moves up. Check out My posts on AUDUSD and USDCAD you will know how this pattern worked in the past. For sample, I'm attaching Aussie, for cad post check in my public profile.
Above chart is not one time instance, I can show you 5 charts for this broadening wedge working in same manner breaking downside and moving up after the breakout. So Gold is expected to give the breakout before Fed meet & move below 1200's, with Fed rate hike ( 80% probability for rate hike) Markets will move in knee-jerk reaction with few session wicks going below 1175's barely kissing 1150;s or staying above during that time. After the dust settles down, Gold will move up as it will be considered as safe asset.
Now we will have a look at DXY,
So in next 3 weeks DXY will reach 103's and will move down when Fed rate hike is announced. We knew Sell the News which is insync with the post. The upside move for rate hike is already factored in , so the reversal on cards.When it moves down again Gold is sought as safe asset for investment.
Apart from all these, We don't know clear picture of Trump's policies ( Economic especially), by Jan'17 we will get an idea what he is about to do, which will be definitely perceived as bad for Global economy because any change in stable policies is not accepted with cheer.
Now coming to our very own King ( even if it's one eye, We are King ) Indian Economy, you should realize the effects of demonetization.
(a) Due to cash crunch, Business will be affected in Small & Micro firms/industries - Productivity drops
(b) For sometime we will have Unemployment skyrocketing in unskilled sector ( Construction,lathe works etc.)
(c) Real estate prices will drop
(d) Capital to invest in infrastructure & to expand business will be delayed. ( though with rate cuts, cash flow will increase )
(e) Fed rate hike - Rupee depreciates ( Money will flow out of India, DII's are here to save the day )
Need more proof, check this US Index SPX :
When US markets go down what will markets around the world will do ?? I can show the same pattern in many scrips.
But these uncertainty around the markets are enough for Indian markets to go down & What's the safe asset ?? Gold ! Already Indians are good at investing & securing this precious metal, Now demand will go up and Gold prices will rise. Only if something real good happens for whole global economy it will remain below 1200's,else we will see 1360's level in Gold from 1175's.
Now you might have realized Why its Chakravuyha instead of Straight Arrow from Arjuna;s Bow !
I'm expecting your comments to discuss further, so feel free to comment your opinions...
