Jump to content

US Dollar (DXY) Rally – The Cleanest Shirt in the Dirty Laundry Basket


Recommended Posts

US Dollar Price and Chart Analysis

  • US dollar breaches 110 in holiday-thinned conditions.
  • Euro and Sterling are roiled by fresh energy concerns.

US Dollar (DXY) Rally – The Cleanest Shirt in the Dirty Laundry Basket

The US dollar basket (DXY) broke above 110 early today for the first time in over 20 years as the greenback’s dominance of the FX market shows no sign of abating. The DXY is up over 21 big figures since the start of 2021 - a 23.5% rally – and further gains look likely if the ongoing energy crisis in Europe remains. The US dollar basket is calculated by factoring in movements in six major currencies with the Euro having a 57.6% weighting in the calculation. Weakness in the single currency shows up as a strength in the US dollar basket.

While today’s move higher may be exacerbated by US Labor Day holiday-thinned market conditions, the move higher in the DXY looks set to continue. The US is ahead of the rest of the world’s central banks in the rate hiking cycle, despite Fed chair Powell leaning on ‘transitory’ for too long, and with the US jobs market remaining robust, US rates can stay higher for longer if needed to break inflation.

Looking at the latest DXY monthly chart shows little in the way of resistance ahead. Prior monthly highs may slow any move higher but as these were made around 20 years ago their effect in slowing any further rise in the DXY are likely limited. The US dollar looks overbought but that doesn’t mean that it won’t move higher as the greenback remains the currency of choice.

US DOLLAR (DXY) MONTHLY PRICE CHART – SEPTEMBER 5, 2022

US Dollar (DXY) Rally – The Cleanest Shirt in the Dirty Laundry Basket

 

Sep 5, 2022 | DailyFX
Nick Cawley, Strategist

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
  • General Statistics

    • Total Topics
      20,074
    • Total Posts
      88,131
    • Total Members
      69,067
    • Most Online
      7,522
      10/06/21 10:53

    Newest Member
    Pakhrin
    Joined 03/10/22 10:28
  • Posts

    • Intel Corp., Elliott Wave Technical Analysis Intel Corp., (INTC:NASDAQ): Daily Chart, October 3 2022,  INTC Stock Market Analysis:We are in wave C part of a huge wave 2. I will be looking forshorts only. INTC Elliott Wave count: (C) of {2}. INTC Technical Indicators:All indicators are signaling bearish momentum. INTC Trading Strategy: Looking to short any three wave upside pullback. TradingLounge Analyst: Alessio Barretta         Intel Corp., INTC: 4-hour Chart, October 3 2022 Intel Corp., Elliott Wave Technical Analysis INTC Stock Market Analysis: A textbook acceleration within a nest of waves threes. Looking formuch more downside to come. INTC Elliott Wave count: iii of (v). INTC Technical Indicators:All indicator are bearish, however we are starting to form RSIdivergence which could indicate we are preparing for a slightly larger pullback. INTC Trading Strategy: Looking to short any three wave upside pullback.
    • The Fibonacci MACD trading strategy is a simple but effective strategy that can be used with any type of trading setup. This article will teach you how to use the Fibonacci MACD strategy to profit from markets. Stocks, foreign exchange, futures and options, cryptocurrencies, and commodities can all be traded using this strategy. The Fibonacci numbers had first been described in Indian mathematics as early as 200 BC in Pingala’s work on enumerating possible Sanskrit literature areas to enable syllables of two bundles. They are given the name after the Italian mathematician Leonardo of Pisa, later known as Fibonacci, who popularized the sequence in Western European mathematics in his 1202 text Liber Abaci. MACD & Fibonacci – Powerful Combination There are two main ways in which Fibonacci is generally used in trading – Using Fibonacci and price action Combination of Fibonacci with other trading tools  Fibonacci tool is positioned so that point zero corresponds with the extreme swing low on the left and point one corresponds with the highest high from which prices began to fall. In the following step, a rejection candle at the 0.5 Fibonacci level is identified, and the next candle is clearly closed above it – this confirms our Entry initiation.  When the macd line crosses the signal line from below in a row, the histogram turns green from red. Prices rose after that, making it a very profitable trade.      
×
×
  • Create New...