Bullish on DXY
In my last update on DXY on 17 Jul, I predicted that the climb up "the wall of worry" of DXY from 99 region will be the 'c' wave of an expanded flat before heading back down again.
DXY indeed went up from 99 to 107 region since then and then consolidating between 107 to 105 region in the past one month. Based on the structure of the impulsive wave, there is a high probability that it is forming a 1,2 wave pattern instead of a 'c' wave pattern. On top of that, there is also strong support in the 105 region where DXY is consolidating.
The nonfarm payroll data for October published last week shows fewer jobs were added than what most analysts have expected and there is widespread speculation that the rate hike cycle is over and the interest rate cut is scheduled to take place early next year, resulting in a sharp drop in DXY and a rise in gold and gold miner stocks last Friday.
I, nonetheless, still hold on the mantra, ' higher for longer' that rate cut will not occur until end of next year. Besides, gold should be heading for another down cycle ( will update later) down to 1600 region, consolidating and then drop again.
I took another look in the drop of DXY from last Oct at 116 to 99 this July and managed to identify a WXY structure as depicted in the chart. A double zigzag pattern, W(abc)-X-Y(abc), with both b waves behaving as triangles with wave e failure, and X retracing 38.2% of W.
An imminent rise of DXY is on the horizon, if not , it is already on its way. The next consolidation should be in 112, 113 region.
DXY indeed went up from 99 to 107 region since then and then consolidating between 107 to 105 region in the past one month. Based on the structure of the impulsive wave, there is a high probability that it is forming a 1,2 wave pattern instead of a 'c' wave pattern. On top of that, there is also strong support in the 105 region where DXY is consolidating.
The nonfarm payroll data for October published last week shows fewer jobs were added than what most analysts have expected and there is widespread speculation that the rate hike cycle is over and the interest rate cut is scheduled to take place early next year, resulting in a sharp drop in DXY and a rise in gold and gold miner stocks last Friday.
I, nonetheless, still hold on the mantra, ' higher for longer' that rate cut will not occur until end of next year. Besides, gold should be heading for another down cycle ( will update later) down to 1600 region, consolidating and then drop again.
I took another look in the drop of DXY from last Oct at 116 to 99 this July and managed to identify a WXY structure as depicted in the chart. A double zigzag pattern, W(abc)-X-Y(abc), with both b waves behaving as triangles with wave e failure, and X retracing 38.2% of W.
An imminent rise of DXY is on the horizon, if not , it is already on its way. The next consolidation should be in 112, 113 region.
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