Another 48h - A Vitally Bullish Week Comes To An End In DXY

2024/12/13
Another 48h - A Vitally Bullish Week Comes To An End In DXY
“little changed today on friday after 5 rising trading days!
has the previous two-week downward trend ended?”



The green economic miracle in Germany, consistently promoted by our German green economics minister Habeck and or also the social democratic Chancellor Scholz, under the guise of a liberal social market economy, can record new success stories: "Exports from Germany dropped by 2.8% month-over-month to nearly 3-year low of EUR 124.6 billion in October 2024, compared with market estimates of a 2.0% fall and after a marginally revised 1.8% decrease in the previous month. It was the second straight month of falling outbound shipments and the steepest pace since December 2023, with sales to the EU down by 0.7%, namely to the Euro area (-0.7%) and non-Euro area (-0.9%). Additionally, exports to third countries plunged by 5.3%, dragged by lower sales to the US (-12.2%), China (-3.8%), and Russia (-9.4%) but rose to the UK (2.1%) For the first ten months of the year, exports fell 1.2% from the same period in 2023 to EUR 1.3 trillion." We have now been in a slight - but de facto - recession for 5 quarters. And if you draw attention to it and talk about it, you will be denounced as a political polluter. Not that we misunderstand: I don't want to publish any political statements on a daily basis at this point. But if I perceive any political influences in relation to price action and/or the economy as well as monetary policy, I consider it my duty to (not) publish them on a case-by-case basis. "Because, the gross domestic product in Germany contracted 0.3% year-on-year in the third quarter of 2024, matching the same pace as in the previous period, and coming more than the initial estimates of a 0.2% drop. This marked the fifth consecutive quarter of economic contraction. And the export numbers don't suggest a positive outcome for the 4th quarter also." No question: it is time in my country of birth and/or home country Germany to reshuffle the cards politically - even if we might get the same Federal Chancellor and/or Economics Minister in the event of new elections in 2025! What will also be decided politically here in Germany in the coming calendar week. Therefore, our Federal Republic of Germany and/or France remain the two biggest problem children in our Eurozone - and or also the reason why there is currently no reason (yet) to buy the EURUSD. Vice versa: no reason toe become very bearish for the DXY .

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

Those were the two questions last calendar week - to learn something! And what have we learned? Both bears and bulls were not that strong. Looking back, I may have to admit that, for better or worse, I defined the price action a little too far apart. But I think we should give ourselves time until 2025. Even until January 20th, when Trump is officially back in the office. Because then the cards are shuffled again as far as the price action is concerned. And until then, we should continue to be content with the same question. Because the price action between 107.348 points (Annual Year High 2023 from 2023/10/03) and/or 106.517 points (1st Annual Year High 2024 from 2024/04/16) are groundbreaking. Last week before the bears took over. pathbreaking for last week, and/or this week after DXY closed at 105.970 points this weekend, after last weekend 105.782 points. Which is why it looks like we will see a DXY down to 104.447 points from Friday, the 2024/08/02.

“The main difference between me and other people who have amassed this kind of money is that I am primarily interested in ideas, and I don't have much personal use for money. But I hate to think what would have happened if I hadn't made money: My ideas would not have gotten much play.”
George Soros

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

It looks like we will see a DXY down to 104.447 points from Friday, the 2024/08/02 because a price action until this price action zone and/or even below is definitely within the scope of probability. Because looking back, between the annual highs of 2024 and/or 2023, we can now see something like a bearish trend reversal formation in the DXY chart. Admittedly not as big as the bullish trend reversal formation - but at least a bearish counter reaction to the previous bullish one. And this could send the DXY even until around and/or down under 104.447 points from Friday, the 2024/08/02. When fears arose in the financial market that the US unemployment rate would skyrocket, the Fed would have to cut interest rates to prevent an US recession, and as a result, US inflation would inflate again - and we were nevertheless cyclical as history tells us still fall into a US recession. However, will it happen? It will be like it will be! And/Or allow me to use the words of El-Erian: “Fed Will Be Comfortable Cutting Rates”, as you can hear on Bloomberg Surveillance Podcast, from last Friday, as the last US unemployment rate came out.


108.071 : 2024/11/22 - Annual Year High 2024
107.348 : 2023/10/03 - Annual Year High 2023
106.517 : 2024/04/16 - 1st Annual Year High 2024
106.490 : 2024/05/01 - 1st False Breakout To New High
106.130 : 2024/06/26 - 2nd False Breakout To New High
105.970 : 2024/12/06 - last price action
104.799 : 2024/07/30 - High Before W Trend Reversal Formation
104.426 : 2024/08/02 - High Of The August 2024 2 Day Sell-Off
102.160 : 2024/08/03 - Low Of The August 2024 2 Day Sell-Off
Be that as it may, both US inflation data from yesterday day before and/or PPI data from yesterday have not signaled a decline in inflation in the USA. Let alone we can except lighter US inflation on top of that - but I don't want to be too pessimistic either. Let's wait for next month to better understand the big picture. But today there is no reason to sell the DXY because of these both last data.

I hope you will forgive me for the polemics in the above text.
But it was and is only the expression of disappointment in what is currently happening in terms of economic policy in my birth country, in my home country of Germany. In our multi-party system, the conservatives are unable to forge a coalition with the liberals and/or nationalists, even economists policy friendly parties, because our political class and/or the majority of our society, due to history, do not want to formally and legally allow nationalists to have the levers of power. What I understand - I'm a son of immigrants! As long as Jews and Christians, let alone Muslims, and/or other foreign (non)religious minorities do not feel safe here in Germany, let alone German ones, and/or representatives such as the German Central Council of Jews and/or the German The Catholic Church does not define the AFD as a threat to democracy, neither the CDU/CSU (large conservative people's party) nor the SPD (large social democratic people's party) will have a majority with the nationalists enter. And we are faced with more or less the same problem in Germany as in France. But enough politics - let alone polemics. There are also pleasant things to analyze. There are good things to report, like the DXY price action. Because the trend since Friday last week has not only continued until today, including today for 6 trading days. No - the price action of the DXY is currently at 107,001 points. As you can see in the chart above, this also with a breakout from the small, fine upward trend channel! What does that mean? First of all, not much - but I don't want to badmouth the price action this week either. Because, after we previously had 7 red bearish days in the two calendar weeks and only 2 green bullish ones, the bulls seem to be reclaiming the terrain above 106.517 points in the form of a small, fine upward trend channel. What was the annual high for 2024 for a long time, from 2024/04/16. Nevertheless, we should wait for the last few hours of this week - but things are looking far more constructively optimistic for US dollar bulls. Because US inflation data has not fallen (on Wednesday) and/or the US PPI yoy has risen by +$3.0 yesterday (on Thursday). Therefore, no trader, let alone investor, is thinking about the near end of US inflation and/or position themselves accordingly. Which also confirms the fact that the price action has more or less left all previous December 2024 highs behind in the last 48 hours.
107.000 : 2024/12/13 - last price action
106.731 : 2024/12/02 - Monday Intraday High
106.602 : 2024/12/03 - Tuesday Intraday High
106.720 : 2024/12/04 - Wednesday Intraday High
106.637 : 2024/12/10 - Tuesday Intraday High
106.806 : 2024/12/11 - Wednesday Intraday High


With best wishes
and with good intentions!
Aaron



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