September 18th of last year - that's when the Fed cut rates for the first time in that cycle, and the US Dollar set a fresh low at 100.22, building a falling wedge in the currency at the time.
That was a 'jumbo' rate cut, by the way, with the Fed knocking rates back by 50 basis points and it was the first rate cut since they had to quickly tighten rates to try to soften inflation following the spike in 2021 and 2022.
But that seemed to matter little, even though markets held expectation for more softening in 2024 which the Fed delivered with another 50 bps of moderation. That 100.22 level stood as key support - bulls rallied out of the falling wedge, and as we went into Q4, buyers took over in a very big way.
That rally held through the New Year open and then another theme took over - fear - driven by the very unknown prospect of massive tariffs levied by the US on pretty much the rest of the world. Quickly forecasts began to turn dim and fears of recession took over which, of course, were expected to be met by rate cuts.
While Trump took a step back from tariff implementation in April, allowing for both equities and USD/JPY to recover, there's remained an expectation for FOMC softening, and we've already seen two rate cuts.
But, interestingly, ever since the first cut on September 17th of this year, DXY has been pushing both higher-highs and higher-lows - and right now - the same swing low from last year of 100.22 is in-play as resistance.
This retains a bullish appearance for the greenback as the test at this level two weeks ago marked a fresh four month high. The monthly chart showed a morning star that completed in October, and the weekly and daily chart clearly shows the falling wedge breakout - all factors that point to potential strength.
Perhaps the bigger item at the moment is in that large component of DXY of the Euro, which is a 57.6% clip of the Dollar basket. EUR/USD is bearing down for another test of the 1.1500 figure, which, historically speaking, is not a level that gives way easily in the pair. - js
That was a 'jumbo' rate cut, by the way, with the Fed knocking rates back by 50 basis points and it was the first rate cut since they had to quickly tighten rates to try to soften inflation following the spike in 2021 and 2022.
But that seemed to matter little, even though markets held expectation for more softening in 2024 which the Fed delivered with another 50 bps of moderation. That 100.22 level stood as key support - bulls rallied out of the falling wedge, and as we went into Q4, buyers took over in a very big way.
That rally held through the New Year open and then another theme took over - fear - driven by the very unknown prospect of massive tariffs levied by the US on pretty much the rest of the world. Quickly forecasts began to turn dim and fears of recession took over which, of course, were expected to be met by rate cuts.
While Trump took a step back from tariff implementation in April, allowing for both equities and USD/JPY to recover, there's remained an expectation for FOMC softening, and we've already seen two rate cuts.
But, interestingly, ever since the first cut on September 17th of this year, DXY has been pushing both higher-highs and higher-lows - and right now - the same swing low from last year of 100.22 is in-play as resistance.
This retains a bullish appearance for the greenback as the test at this level two weeks ago marked a fresh four month high. The monthly chart showed a morning star that completed in October, and the weekly and daily chart clearly shows the falling wedge breakout - all factors that point to potential strength.
Perhaps the bigger item at the moment is in that large component of DXY of the Euro, which is a 57.6% clip of the Dollar basket. EUR/USD is bearing down for another test of the 1.1500 figure, which, historically speaking, is not a level that gives way easily in the pair. - js
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Informasi dan publikasi ini tidak dimaksudkan, dan bukan merupakan, saran atau rekomendasi keuangan, investasi, trading, atau jenis lainnya yang diberikan atau didukung oleh TradingView. Baca selengkapnya di Ketentuan Penggunaan.