Quickpost: Big Picture on DXY and anti-fiats
There is a pretty well understood relationship between fiat, like the dollar, and anti-fiats, like precious metals and crypto. With some trend lines we can see that when DXY bases out on long term support more likely than not anti-fiats are either on the verge of topping or in the process of selling off. Well established by now. That base-ing out can be viewed as faith being restored to the dollar and less need to hedge against whatever instability caused the dollar weakness/cheapness.
KEY POINT DXY has decisively broken an uptrend of support in orange. The price action at the break suggest this was a major area of distribution and that area either bisects or trisects the complete move down. The falling support in fuscia gives an area where price action could land and bounce off. This fuscia line meets rising support in purple at the blue cross in mid-2022.
The big picture plan is simple... I am going to be investing in my preferred anti-fiat for the next year and a half and when price action reaches the blue cross I will see if there is topping behavior on the anti-fiat and if I should pivot out into some other asset. If the triangle starts to perform bearishly I look for price action to go to the base of the channel which it hasn't visited in over 10 years. There may be a 10 year bull market in anti-fiats should this triangle break down which makes investing rather easy.
This isn't the whole picture because interest rates, real and nominal come into play but so long as they stay low. No telling how that long will be but eventually this falling wedge on the effective federal funds rate will have to perform. I have a strong suspicion it will be around the time DXY finds support at the blue cross.
Please review the linked ideas for my other thoughts on DXY. The bearish one is the latter, and therefore more mature and accurate post. the DXY target setting one was before I had a wider view on DXY and was a wrong call to the upside.
KEY POINT DXY has decisively broken an uptrend of support in orange. The price action at the break suggest this was a major area of distribution and that area either bisects or trisects the complete move down. The falling support in fuscia gives an area where price action could land and bounce off. This fuscia line meets rising support in purple at the blue cross in mid-2022.
The big picture plan is simple... I am going to be investing in my preferred anti-fiat for the next year and a half and when price action reaches the blue cross I will see if there is topping behavior on the anti-fiat and if I should pivot out into some other asset. If the triangle starts to perform bearishly I look for price action to go to the base of the channel which it hasn't visited in over 10 years. There may be a 10 year bull market in anti-fiats should this triangle break down which makes investing rather easy.
This isn't the whole picture because interest rates, real and nominal come into play but so long as they stay low. No telling how that long will be but eventually this falling wedge on the effective federal funds rate will have to perform. I have a strong suspicion it will be around the time DXY finds support at the blue cross.
Please review the linked ideas for my other thoughts on DXY. The bearish one is the latter, and therefore more mature and accurate post. the DXY target setting one was before I had a wider view on DXY and was a wrong call to the upside.
Publications connexes
Clause de non-responsabilité
Les informations et les publications ne sont pas destinées à être, et ne constituent pas, des conseils ou des recommandations en matière de finance, d'investissement, de trading ou d'autres types de conseils fournis ou approuvés par TradingView. Pour en savoir plus, consultez les Conditions d'utilisation.