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US10Y

DXY, working into a wedgeMarkets will be hanging on the lips of the Fed on Wednesday and I expect another weak NFP's report on Friday. The DXY can go either way from here but I'm keeping an eye on the US 10 year yield. If it fails to hold its current channel I'll be getting my dollar shorts ready before another set of weak NFP's data on Friday. A failed break above 94.440 will see the DXY fall back onto the 50-day MA of 93.360. Looking further into November we could see the DXY moving lower towards the 200-day MA at 91.960 if the Fed's supposed taper falls through the roof. Technically however the RSI still has room to climb before the dollar enters overbought territory, along with the golden cross, which is dollar positive.
TVC:DXYShort
by GustavFourie96
3
More USDollar strength? #DXY + Fundamental driversHello traders! I expect more upside for the dollar both technically and fundamentally. Fundamental Bias: Weak Bullish Primary Driver: 1. The Monetary Policy outlook for the FED Rationale: More hawkish than expected sums up the Sep meeting. The FOMC gave the go ahead for a November tapering announcement as long as the economy develops as expected with their criteria for substantial further progress close to being met. The biggest hawkish tilt was the announcement about a faster pace of tapering, with Chair Powell saying there is broad agreement that tapering can be concluded by mid- 2022. Inflation projections were hawkish, with the Fed projecting Core PCE above their 2% until 2024. On labour, Chair Powell said he thought the substantial further progress threshold for employment was ‘all but met’ and explained that it won’t take a very strong September jobs print for them to start tapering as just a ‘decent’ print will do. The 2022 Dots stayed very close to the June median, but the rate path was much steeper than markets were anticipating with seven hikes expected over the forecast horizon (from just two previously). It is important here to note though that even though the path was steeper, if one compares that to a projected Core PCE >2% for 2022 to 2024, the rate path does not exactly scream fear when it comes to inflation. All in all, it was a hawkish meeting. Interestingly, it took markets about three days to realize this as the expected price action only really took hold of markets a few days later. A faster tapering was a key factor we were watching for an incrementally bullish tilt in the outlook, so market’s initial reactions were surprising. However, with the recent breakout in both US yields and the USD, this has given us more confidence in moving our fundamental outlook for the Dollar from Neutral to Weak Bullish. Primary Driver: 2. Real Yields Rationale: With a Q4 taper start and mid-2022 taper conclusion on the card, we think further downside in real yields will be a struggle and the probability are skewed higher given the outlook for growth, inflation and policy, and higher real yields should be supportive for the USD in the med-term. Primary Driver: 3. The global risk outlook Rationale: One supporting factor for the USD from June was the onset of downside surprises in global growth. However, recent Covid-19 case data from ourworldindata.org has shown a sharp deceleration in new cases globally. Using past occurrences as a template, the reduction in cases is likely to lead to less restrictive measures, which is likely to lead to a strong bounce in economic activity. Thus, even though we have shifted our bias to weak bullish in the med-term, the fall in cases and increased likelihood of a bounce in economic activity could mean downside for the USD from a short to intermediate time horizon (remember a re-acceleration in growth and potentially inflation = reflation) Primary Driver: 4. Economic Data Rationale: Economic data will be very light in the incoming week with the main highlights being PCE and Advanced GDP (old news). Also keep in mind that the Fed has largely reduced the impact of economic data going into the November FOMC meeting by already acknowledged a Nov taper and a possible mid-2022 conclusion. So, even though data will be important, it’s unlikely to sway the Fed from their tapering plans. Primary Driver: 5. CFTC Analysis Rationale: Latest CFTC data showed a positioning change of +872 with a net non-commercial position of +35934. Positioning isn’t anywhere near stress levels for the USD, but the speed of the build-up in large specular positioning measures over 2-standard deviation on a 1-year look back period. Thus, even though the med-term bias remains unchanged, it does mean the USD could be sensitive to mean reversion risks while still trading close to YTD highs. Thus, reflationary data and overall risk sentiment will be a key focus for the USD in the week ahead. Have a great week! Vitez
TVC:DXYLong
by Vitezabraham
US10Y Signs of a bearish reversal.The US10Y has reached (and so far got rejected on) the 1.707 Resistance (1), which last time rejected the price on May 13. With the 1D RSI on a Bearish Divergence (is on Lower Highs while the actual price is on Higher Highs), similarities can be made with the February 25 - March 30 sequence, which after an RSI Bearish Divergence got rejected on the 1.775 Resistance (2) and essentially started the correction towards the 1.125 Support. We are expecting a pull-back towards the 0.382 Fibonacci Retracement level and if broken the 0.618 level which may be even more likely as it is the top of the recent High Volatility Cluster. -------------------------------------------------------------------------------------------------------- ** Please support this idea with your likes and comments, it is the best way to keep it relevant and support me. ** --------------------------------------------------------------------------------------------------------
TVC:US10YShort
by TradingShot
4
My Forecasts: PostscriptLet me say this from the outset; within the 2's5's curve is a manual, given that I do not have a great deal of time, it is not possible for me to go into great dimensions or detail I have chosen. Instead we will have to content ourselves with the revolutionary charts/diagrams both before and of the period where I have gone into more details. The same is true of the other important charts (VIX and Unemployment Claims) I refer to below. So now that we are all prepared and understand the knowledge, we must start to turn the dusty pages. Firstly lets review a chart on which I stack tremendous value: I would not wish to enter into conspiracies. There have been a handful of inversions in the manuscripts over the past three decades which all speak historical truth in advance of the crisis. The advance in the 5 year suggests salvation from the Fed can only come in the medium term as the 2 year lags behind. And now to the point around Alpha Protocol Seeking Immediate Extraction . The 2's5's is already under the nature in an impulsive form. The prior three inversions (Housing and Credit, Dot com, GFC) also suffered from a lagging Fed, that of being at least 10-12 months behind! This means that it is not uninteresting to highlight the totally overlooked inversion in 2019, it was a loud SOS signal that the economy was clearly running out of steam. I was the one who was able to properly understand that manoeuvre in both Unemployment Claims and Vix ahead of time, calling the move from 12 to 85; with complex inversions, always look to play against the crowd. See our opening in US Claims and VIX before the fact: Given we are facing both inflation via contractions in globalisation and deflation via advancements in technology etc all at the same time, it is causing a major paradox/dissonance across the board. It would serve no purpose to mention or not hint at what will happen next; my personal sense is that because the Fed ALWAYS lags behind, we will see another example of the long end of the curve driving the flows ( for those interested in bull steepening and bear flattening I have also omitted the exclamations in bold ). This would suggest that it is likely that we could be heading into an environment where you see nominal yields receiving a booster shot while real yields flatten causing further pressure on USD.
TVC:US05YLong
by ridethepig
8
Checking in w/ GoldThe mysterious selling at 1775 (or not so surprising for those who have been tracking the flows since the last diagram). This linkage was known to the pseudo-classical school of TA. The other highlights are going to USDJPY which was reckoned to be such a move to 150. The 1775 previous support has become resistance for our opponent (and if we are able to test, then we know buyers are "wasting their time" there). Such a move should be faded, never play without being aware that you are sacrificing a certain effectiveness by not selling the steel resistance at the top of the range but we are preventing our opponent and rendering them with more difficulty. If we recognise that any attempt of a breakup from out opponent is not a genuine one (i.e it does not lead to the freeing of the structure) then it would be highly uneconomical to not add offers to the basket. Failing that, a break below the 1725 lows will trigger a waterfall into the 'C' target located at 1520. The bet was to load on 1775 with NFP outguessing the early development of a swing down, it does not really get much simpler than this for those configuring positions. A break of 1725 is next in play and will open the floodgates, soon all will become clear. Buyers attempting to play any early advance are at risk of total annihilation.
FOREXCOM:XAUUSDShort
by ridethepig
14
ridethepig | Gold, Yields and ResistanceFirst, and as usual, lets start with the traditional recap... The following position has been reached and is coming around only AFTER Buyers have finished their move: respectively, the swing up into 1970/2000, which interlocked with profit taking and the Covid unwind, demanded an attack from sellers by means of switching sides. A flawless swing with a competitive salary. When most thought the sky is the limit, we kept our cool and started to switch sides with some counterplea. As usual, you do not do all of the work charting, modelling, finding areas of value to unload etc just to walk away.... you also need to be ready to attack in the other direction, otherwise energy is wasted. For those wanting to track the charts and examples they can be found here: Thus we had the "mysterious" profit taking and unwind, the manoeuvre from sellers has been very fluid and is creating the most pleasing ABC effect when you look through the weekly. Of course, this leg is already well underway, so for those looking to make use of the momentum from sellers then we need to look for fresh areas which can be quite fair value, we shall rather call semi-cheap because the leg is more than active. The 1775 previous support has become resistance for our opponent (and if we are able to test, then we know buyers are "wasting their time" there). Such a move should be faded, never play without being aware that you are sacrificing a certain effectiveness by not selling the steel resistance at the top of the range but we are preventing our opponent and rendering them with more difficulty. If we recognise that any attempt of a breakup from out opponent is not a genuine one (i.e it does not lead to the freeing of the structure) then it would be highly uneconomical to not add offers to the basket. Failing that, a break below the 1725 lows will trigger a waterfall into the 'C' target located at 1520. In the above title, I mentioned Yields, the reason this is abundantly clear. Since this is very characteristic when bond bears take control, we clear the initial 1.45 target, now 1.55 is in the crosshairs with 1.62 above, and higher yields will continue to weight heavily on Gold prices.
FOREXCOM:XAUUSDShort
by ridethepig
10