2022/05/02 (037) Technical Analysis

This Week Will Decide The Path For The USD Index
This Week, This Month May, Next Months June And August!
Will Interest Rates Be Raised 3 Times By 50 Basis Points, This Summer?

The Fed will need to hike US interest rates up to 5 percent to catch the hottest streak of inflation in 40 years as the world faces a ‘perfect storm’ of potential recessions in the US, European Union and China“, the ex-IMF-Chief Economist Kenneth Rogoff said.

The idea that raising US interest rates to as little as 2-3 percent will rein in US inflation, which has already galloped away, is unlikely, according to Kenneth Rogoff. “I think they’re going to have to raise interest rates to four or five percent to keep inflation up to 2.5 or 3.0 percent”, the Harvard professor said in a Bloomberg TV interview. And added, “there’s just a lot of uncertainty. I won’t say I know exactly what needs to be done. But it’s clear that things have gotten completely out of hand.” But I would like to say it, in all modesty! After the catastrophic fiscal policy of the US Democrats, under the watch of Joe Biden, his left-wing green energy policy (even though the US produced more oil than it consumed itself for the first time in decades), let alone the sleepy US foreign policy (Afghanistan exodus, Russia’s attack on Ukraine), also under the watch of Joe Biden and his US Democrats, the FED, Jerome Powell, now has no choice but to raise US interest rates. Because the US inflation did not fall from the sky, but rather the consequence of the fiscal policy outlined just briefly, and or also the economic policy, of the US Democrats, under the watch of Joe Biden.

Be that as it may, the US voters will either vote against Joe Biden, either against his fiscal policy, but rather also against the democratic economic policy, in the fall – or not! As an outspoken political friend of Donald J. Trump and a political federal republican from my home country, the Federal Republic of Germany, I have only the option of competently pointing this out to you – my readers. To inform you 100%. And also 100% to the best of our knowledge and belief. So that you, not only but above all, make the right trading decisions when it comes to market participation in the financial market.A Perfect Storm Is Brewing

Rogoff spoke of the “risks of a perfect storm” and of recessions in which European economic growth is shrinking because of Russia’s war in Ukraine, China’s economic growth is slowing because of a “failed Covid lockdown policy” and the US economy is shrinking because the Fed too much and tightened too quickly.

“If China has a supply recession, which we expect, it will fuel inflation and hurt demand in Europe”, Kenneth Rogoff said. “I would say that the risk has increased noticeably that this could happen“, he said of a US economic downturn that would hit global financial markets. “Things could turn out well and that’s why there’s a lot of uncertainty – but it’s not difficult to see all these risks”, he said, adding that China might already be on the brink of one recession.

Basically Technical Analysis In An Historical Context
– Take Care Of Following Price Areas Below, My USD Index Bulls

103.82 points (monthly high from 01/2017)
103.65 points (monthly high of 12/2016)
100.51 points (monthly high of 12/2015)
100.39 points (monthly high of 03/2015)

That’s why I also raised the stop course, this DXY trading capability, to 100 USD. And not just to secure our accrued profits, but also because if we fall below 100 points, the historical long-term picture, in the course development so far, should cloud over again.

Trading above 100 points confirms the long-term sideways trend in the USD index that has been ongoing since March 2015. Conversely, prices of over 100 points not only technically signal a bullish breakout, but also historically confirm it. Rather, building on this, the air upwards, towards the north-east, even up to 120 points, is possible in the next 10 years.But I expressly do not want to formulate such long-term historical anticipation attempts, since, for such long periods of time, many variables play a role – not only economic influences (such as economic growth, the trade balance, the labor market, and inflation) but also US fiscal policy of the Democrats and/or Republicans, as well as the monetary policy of the FED – which I cannot verify. Which I don’t want to verify.

Crucial technical markers for this DXY trading capability are, at least in my opinion, in a historical context, for trading the coming days, weeks, months, and also years (at least until the end of 2024 – after the upcoming US presidential elections), too the 102.99 points and 94.65 points.102.99. Because this monthly high or monthly low, with its +8.81% of the low price or -8.10% high price, manifests the month of March 2020, in which, as is well known, many nations organize their economy state-wise due to the outbreak of the corona virus , have legislatively shut down.

Because only with prices above 102.99 points can we historically argue that the financial market, especially the foreign exchange market participants, left the corona virus shock behind, if you will, at least in terms of prices. And not only that. The USD index is currently trading again above the level of the outbreak month of March 2020 – just 102.99 points.USD INDEX Firms Up
Ahead Fed Meeting On Wednesday

The dollar index firmed up above the 103 level on Tuesday, holding near a 19-year high hit last week, as traders prepared for a key Federal Reserve meeting later this week where it is widely expected to raise interest rates by a hefty 50 basis points.

Fed policymakers look set to deliver a series of aggressive rate hikes at least until the summer to deal with rapid inflation and surging labor costs, even as two reports on Friday showed tentative signs both may be peaking. Weaker-than-expected quarterly US growth data on Thursday also proved little obstacle to the dollar’s rise, and investors hardly adjusted their near-term interest rate bets.

Moreover, fears of an economic slowdown in Europe and China driven by the Ukraine war and Covid lockdowns, respectively, spurred safe haven flows into the dollar.