Another 48h - DXY (Daily) The Runaway Bride

2024/10/20
Another 48h - DXY (Daily) The Runaway Bride
“the largest government-organized debt organization in human history!
how long will the market remain, will we remain optimistic?”


Today I would like to discuss the price action without the w trend reversal formation - on a daily basis, using candlestick charts. I would like to bring the big picture to the fore, almost mentioning historical context. Because the DXY is on two crucial price action marks this weekend.

103.777 points - (2024/10/18) - SMA 200 hl2
103.463 points - (2024/10/18) - last price action
103.820 points - (2017/01/03) - mid-term high

In early 2022, the DXY shot up as the war began in eastern Ukraine.
Since then, the US dollar has proven itself to be a liquid haven also due to the FED's consistent restrictive monetary policy - where everyone, including you and me (as simple private individuals who want to quickly earn legal money on the financial market). Which in turn was just a logical reaction function, if you will, due to the US government's fiscal policy. First the Corona virus outbreak and then the costs of war in Eastern Europe. Because FED boss Jay and his decision-makers were in our so-called West the fastest and highest when it came to raising interest rates from 2022. So many people invested their money in the liquid haven of the US dollar - whether with a fixed interest rate, in Chicago (thanks to a higher and more expensive yield curve) and/or even with a risk premium, in New York (in the stock market).

What is interesting in this historical geopolitical context, at least in my humble opinion, is the fact that the last high was in September 2022, at 114.778 - and still is today. Why? Because it's the high and low in the week of September 2001, during the terrorist attacks on the Twin Towers, the World Trade Center, which was traded at 115.100 and/or 112.200 at that time back then. And that before the historic sell-off of the US dollar began in the following spring of 2002 - down to 70.698 (in May 2008).

70.698 points - (May 2008) - long-term low
88.942 points - (May 2018) - low after mid-term high
92.630 points - (December 2005) - last high before long-term low
99.578 points - (November 2023) - new 2nd mid-term higher low after long-term low
103.820 points - (March 2017) - mid-term high
114.778 points - (November 2022) - new 2nd mid-term higher high after long-term low

“A global economy is characterized not only by the free movement of goods and services but, more important, by the free movement of ideas and of capital.”
George Soros

That's why the annual high of 2017, of 103.820 points, from 2017/01/03, which was traded on the first day of trading, is so important. Because a price action above this confirms a long-term historical trend reversal in the DXY - from a technical analysis perspective! Is this fundamentally justified? Due to the current and future US monetary policy of the FED? Due to the current and future US fiscal policy of the Trump or Harris administration? We will experience that - one way or another!

• Does The 200 SMA (103.777 points) Serve As Support?
  
• Does The 200 SMA (103.777 points) Serve As Resistance?
  
• Does The 2017 High (103.820 points) Serve As Support?
  
• Does The 2017 High (103.820 points) Serve As Resistance?
  

These 4 questions need to be answered! Not in the next 48 hours? Maybe later - this and/or next week (next 5 and/or 10 trading days). However, if we ask ourselves that way, we can learn something new with the help of price action; or we remember that we already knew something old and now know it is confirmed. Be that as it may; If we ask ourselves these 4 questions every day in the current calendar week and/or over next calendar week while the price action is running, we will definitely (not) learn something new.


With best wishes
and with good intentions!
Aaron



Another 48h - DXY ... is pure information material.
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