Another 48h - The Bears Have Taken Command In The DXY This Week

2024/11/29
Another 48h - The Bears Have Taken Command In The DXY This Week
“the dxy was trading lower every day on all 5 trading days this week!
is this a new trend now? or just a correction before dxy go up again?”



France and Germany, the two core countries in Europe, are in a serious fiscal and/or economic policy crisis - and there are some parallels between the two countries. And some parallels stand out - due to the political structure in both countries. In contrast to the USA, there is no two-party system in Germany or France, let alone the “winner-takes-all” principle. Which means that whoever wins a simple majority in a state brings together all the electors in that state - regardless of whether the lead is huge or just wafer-thin. In contrast to my home country Germany and the USA, where the constituency candidates are elected with the first vote in the federal election, there is no second vote in the USA. And no winner-takes-all principle either. But in France there is a second round if the absolute majority is not achieved in the first round. Which is why I am an ardent supporter of a two-party system - and why the USA was and still is the leading political power in our so-called West. Because if more than two political parties cannot agree with each other, as in Germany and France, there is a division in elite society against so-called populists from the left and the right. While in France, government spending is too high and government revenue is increasing due to even higher tax burdens, the decline of industry in my home country Germany is largely self-inflicted due to an almost insane energy policy. And so the Financial Times aptly headlined today "French government warns Marine Le Pen's party over budget battle" - while Yahoo Finance! The following article summed it up: “France’s Le Pen Boosts Budget Asks Ahead of Monday Deadline”. While US yields have tended to become cheaper in the last few days and weeks, EUR yields in numerous individual countries, such as France and Germany, appear to be becoming more expensive. Germany, the fifth-largest global economy and by far the largest in the European Union, is facing challenges that impact all of Europe. If you want to know, what are the root causes of this situation in my homeland Germany? Read the great Article of GIS Report Online "To stop sinking, Germany must drop its failed economic policies". Here in Germany, we are deliberately making the basic needs of everybody, i.e. food and/or energy, more expensive due to the climate, due to green politics, under the guise of a liberal democracy! Let that melt in your mouth and ask yourself what the consequences are? That's right - everything is becoming more expensive, and not just in the way we feel. No - that is the logical, predictable consequence if the state wants to keep basic needs scarce - as in the history of humanity only in socialist societies. What a self-inflicted disaster for us Europeans, for us Germans - and all of this before Trump comes to power and will thereby make the situation even worse. The usual Black Friday rally on Wall Street today, mainly due to rising semiconductor stocks, while the US Yield Curve continues to become cheaper - US yields are now falling relatively significantly.

• Will We Fall Back In The W Trend Reversal Formation?
  
• Will We Defeat The Old Annual High Of 2024?
  
• Are We Heading To Annual Highs Of 2023?
  

These were the 3 most important questions regarding price action in DXY - and which could be answered with no, yes, yes, in the last week. Because in the first two trading days the price action had more or less fallen back to the level of the previous annual high of 2024 by the middle of the week, after the price action rose up, during the last week before. Since Wednesday, the DXY rose above the annual high of 2023 for the first time into the weekend - at least on Friday.

“I commissioned two political experts to advise me about what I could do to oppose the re-election of President Bush.”
George Soros

• Who Will Takin` Over The Terrain Between The Annual Highs?
  

The price action between 107.348 points (Annual Year High 2023 from 2023/10/03) and/or 106.517 points (1st Annual Year High 2024 from 2024/04/16) are groundbreaking. Pathbreaking for this week, after the DXY closed with 107.490 points last weekend. Because a price action above would give the US bulls confirmation that the rally from the annual low in 2024 to more or less new annual highs in 2024 is continuing. While a price action below this should please the US bears again. And we must have to argue that all the price action of the last few days, the last few weeks, since the end of September 2024, is in danger of running out of steam. And we would have to assume a lower DXY .


108.071 : 2024/11/22 - Friday High, Last Week
106.924 : 2024/11/22 - Friday Low, Last Week
105.782 : 2024/11/29 - last price action
Was the poor figures from the Eurozone and/or Germany just a short-term flash in the pan? Even the depth of the economic crisis? Or just the beginning? The price action will show it up! In any case, it is a bad economic cocktail for the EURUSD - vice versa tends to be better for the DXY . Because of the self-organized left-wing liberal green economic politics here in my home country Germany the Germany Manufacturing PMI has been and will remain below 50 points since July 2022. Which corresponds to a tendentially recessive character. And it now seems to be dragging the Eurozone down with it; where the Euro Area Services PMI had also fallen below 50 points back again, on last friday. Therefore, this week was important to at least keep both the high and the low of the price action from last Friday in mind. And what we saw this week? Right - 5 red bearish trading days! What could possibly be a reversal of the bullish upside trend? But not after one red bearish week! Therefore we should still remain cautious and continue to monitor the price action closely on a daily basis.

On today's trading day, the American Black Friday trading day, went as the week had started. With a bearish GAP downwards - including a recovery over the course of the day before it went even deeper down. At least the DXY did not close at the weekly low - but today on Friday we had a new lower daily low compared to yesterday, Thursday, and Wednesday, compared to the previous day. Which speaks for an intact bearish downward trend for the last few trading days. After today "Core inflation in Japan's capital perks up, yen jumps on rate hike bets", what Reuters wrote and/or the mood in the euro area is extremely bearish, the feeling began to creep over me today that the financial market participants, me too, in terms of sentiment, are may be (un)consciously (un)intentionally too bullish for the DXY ? And too pessimistic when it comes to the euro area - especially France and or also my home country Germany? But more about that next week…


With best wishes
and with good intentions!
Aaron



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