Jump to content

US Dollar Holds the High Ground as Biden’s Plan Hits a Hurdle. Will USD Rally Resume?


Recommended Posts

US DOLLAR, S&P 500,VIX, NIKKEI 225, TURKISH LIRA, USD/TRY, RBA - TALKING POINTS

  • The US Dollar has held steady as markets gyrate to risk assessments
  • APAC and US equitfutures recover Monday’s losses as sentiment improves
  • G-10 currency pairs are forming tight ranges. Will USD resume its uptrend?
US Dollar Holds the High Ground as Biden's Plan Hits a Hurdle. Will USD  Rally Resume?

The US Dollar has held its strength in the face of rising risks from the spread of the Omicron variant and the uncertainty to the US economy of stimulus measures not being passed by lawmakers.

Wall Street went lower overnight as the US digested news that President Joe Biden’s economic stimulus package has hit some hurdles. This comes at a time that the spread of the Omicron variant is accelerating, and the threat of economic shutdowns become more apparent.

APAC stocks had already gone lower in the Monday session and spent Tuesday recovering, as risk aversion took a breather. Japan’s Nikkei 225 index led Asian bourses higher, trading over 2% higher at one stage.

US equity futures are pointing toward a positive start. The VIX is a futures contract that measures the expected volatility of the S&P 500 over the next 30 days. Not surprisingly, it ticked up overnight as markets sold off. It has since pulled back due to the more positive Asian session today.

Foreign exchange volatility continues to move lower across most currency pairs as holiday markets appear to have started a little early. Liquidity in some markets is already thinning out and if there is a shock to the system, moves might be exaggerated as a result.

However, the Turkish Lira is an exception to this calmer environment. It has seen a wild ride over the last 24 hours. USD/TRY hit a high of 18.3624 yesterday and is now trading near 13.5000.

The recovery of Lira occurred after Turkish President Recep Tayyip Erdogan announced a number of measures to protect domestic retail investors to curb demand for dollars.

In line with the equity markets, US Treasury yields initially went lower in North America, before recovering to be trading near Friday’s close.

RBA meeting minutes were released without too many surprises, as they had followed expectations at the December meeting.

They did consider that the February meeting could see the scrapping of asset purchases altogether if conditions turned out to be better than expected. Alternatively, they looked at tapering again at the February meeting and reviewing it again in May.

Looking ahead, Canadian retail sales data is due out and the current account balance for the US will be released.

 

USD INDEX (DXY) TECHNICAL ANALYSIS

After making a new high for 2021 in November, the US Dollar has held onto the rally as it moved sideways within a 95.517 – 96.938 range. These levels may provide support and resistance respectively.

In this consolidation pattern, volatility has been reducing, as shown by the narrowing of the 21-day simple moving average (SMA) based Bollinger Band. A break either side of these bands could see a volatility breakout.

The September 2020 high of 94.742 is now a pivot point and could provide support.

USD INDEX (DXY)

Chart created in TradingView

 

Written by Daniel McCarthy, Strategist for DailyFX.com. 21st December 2021

Link to comment

Create an account or sign in to comment

You need to be a member in order to leave a comment

Create an account

Sign up for a new account in our community. It's easy!

Register a new account

Sign in

Already have an account? Sign in here.

Sign In Now
  • image.png

  • Posts

    • Wheat Elliott Wave Analysis Function - Trend Mode - Trend Structure -Impulse wave Position - Wave A of (B) Direction - Wave A of (B) is still in play Details -  Wheat daily and H4 have been adjusted due to how fast and deep decline from 720’4 has emerged. The long-term forecast on the daily chart shows that the surge to 720’4 is part of the impulse wave from March 2022. We are now in wave (5) which is expected to emerge into a 3-wave structure. Price now appears to be in wave A after which it will correct upside for B before returning downside. Overview: Since late May, grain prices have been falling sharply, with Wheat shedding over 20% since May 28th, 2024. This decline is about to erase the gains made from mid-April to late May. The nearly one-month sell-off adds to the long-term decline from March 2022, when Wheat traded at 1364’4. Currently trading at 571’4, Wheat is likely to fall further toward 500 in the coming weeks.   Daily Chart Analysis: The decline from March 2022 is forming a bearish impulse wave structure in the primary degree. The 5th wave is completing a diagonal structure, which has been the most time-consuming among the actionary waves, lasting nearly 21 months. The price is currently in wave (5) of 5 (circled), which will likely evolve into a 3-wave structure targeting the 500 major psychological level.   H4 Chart Analysis: The H4 chart shows the sub-waves of wave (5), which is now close to completing its first leg - wave A of (5). A corrective bounce is expected to follow for wave B before the price turns downside for wave C of (5) toward 500, provided the 720’4 pivot is not breached. Wheat and other grains are overwhelmingly bearish and may continue in this direction for the next several weeks before major bullish corrections begin.   In conclusion, Wheat prices remain bearish with potential for further declines, targeting the 500 psychological level, contingent on the completion of the current corrective wave B and the subsequent wave C of (5). Technical Analyst : Sanmi Adeagbo Source : Tradinglounge.com get trial here!  
    • Dear @Naren12166, Thank you for the post. Please note that we don't have a definite date but the product team is in the testing phase, a few countries should have Trading View soon. Thanks, KoketsoIG
    • TXN Elliott Wave Analysis Trading Lounge Daily Chart, Texas Instruments Inc., (TXN) Daily Chart TXN Elliott Wave Technical Analysis FUNCTION: Counter Trend MODE: Corrective STRUCTURE: Triangle POSITION: Wave {iv}. DIRECTION: Bottom in wave {iv}.   DETAILS: Looking for a triangle in wave {iv} of 3 as we have found resistance on TL2 at 200$.     TXN Elliott Wave Analysis Trading Lounge 4Hr Chart, Texas Instruments Inc., ( TXN) 4Hr Chart TXN Elliott Wave Technical Analysis FUNCTION: Counter Trend MODE: Corrective STRUCTURE: Triangle POSITION: Wave (e) of {iv}. DIRECTION: Bottom in (e).   DETAILS: Looking for wave (e) to be near completion to then resume higher and find support on top of 200$.   Welcome to our latest Elliott Wave analysis for Texas Instruments Inc. (TXN). This analysis provides an in-depth look at TXN's price movements using the Elliott Wave Theory, helping traders identify potential opportunities based on current trends and market structure. We will cover insights from both the daily and 4-hour charts to offer a comprehensive perspective on TXN's market behavior.   * TXN Elliott Wave Technical Analysis – Daily Chart* In our Elliott Wave analysis of Texas Instruments Inc. (TXN), we observe a counter-trend corrective pattern characterized by a triangle structure. TXN is currently positioned in wave {iv} of 3, suggesting a bottoming process in wave {iv}. The recent price action indicates that TXN has encountered resistance around the TL2 trendline at $200. This resistance could imply the formation of a triangle in wave {iv}, setting the stage for a potential resumption of the upward trend once the triangle completes. Traders should monitor the $200 level for signs of a breakout or further consolidation within the triangle.   *TXN Elliott Wave Technical Analysis – 4Hr Chart* On the 4-hour chart, TXN is following a counter-trend corrective mode within a triangle structure, specifically in wave (e) of {iv}. The current analysis suggests that wave (e) is nearing completion, which could signal the end of the triangle and the beginning of a move higher. The completion of wave (e) should ideally find support above the $200 level, aligning with the daily chart's indication of a possible upward resumption post-triangle. Traders should watch for the termination of wave (e) and the subsequent price action to confirm a bullish continuation.   Technical Analyst : Alessio Barretta Source : Tradinglounge.com get trial here!  
×
×
  • Create New...
us