2022/10/23 (094) Technical Analysis

The USD Stabiluzes At The Excepted High Levels!
Was It That With The USD Rally? Is The Focus Now On The GBP?
I Don`t Know – But I Know That No One Has Ever Died From Taking Profits…

The GBPUSD Fell To $1.03 On September 26th
– Hitting An Historical New All-Time Low Pice Action

This is the headline that got me thinking as far as the USD is concerned – in the last weeks, last days, and/or even last hours, also!
Because it almost seems as if what is happening in London right now – politically, with the conservative party and even their fiscal policy, let alone the monetary policy of the Bank of England – the focus is shifting of all of us financial market participants from the USD to the GBP! isn`t it? Because let’s not kid ourselves! Who would have ever thought that we would be able to trade (buy/sell) the GBP so cheaply against the USD? In the summer of 2006, when I first seriously dealt with the foreign exchange market, and at that time also for the first time formulated isolated voluntary analyses, for some CFD online brokers, we all asked ourselves, can we break the 2.50 GBPUSD!? Some even dreamed of the 3.00 GBPUSD back then?! Me too, admittedly…

However, back to today! The GBPUSD’s fall, while bold and swift, came as no surprise.
And comes just days after Britain’s newly appointed Chancellor Kwasi Kwarteng announced the new government’s economic growth plan for 2022, which was set to include the country’s biggest tax cuts in more as 50 years. While the GBPUSD exchange rate has since end of September`22 recovered slightly from its decline, Kwarteng’s announcement fueled fears that England will soon face worsening inflation and accelerate into a recession. The last figures published prove him right – even if he is not in office in the meantime. Inflation is higher in the UK compared to the US, as much more economic growth is lower. That`s why I’ve been secretly asking myself for days – and also formulated it in the headline: “The USD Stabiluzes At The Excepted High Levels! What It That With The USD Rally? Is The Focus Now On The GBP? I Don`t Know – But I Know That No One Has Ever Died From Taking Profits…” And truly believe meanwhile, that for our successful long 4XSetUps trading capability in the DXY just at 110 points it would the best to see the stoplost price mark raised – at least to have secured our accumulated profits in the course of the year 2022 so far. I’m not assuming a big trend reversal in the USD Index, but we have to learn to think in historical contexts – as bulls and/or bears – and I think the best thing to do is to put the stop price at first at 110 points. Which gives us a whopping 14 points profit – even proudly 12.73%. And/Or the possible to buy USD cheaper in the short term in order to possibly earn even more money from the medium-term and long-term increase. And that`s why focus on the lower price ranges – still with the expectation that the USD can rise to up to 120 and more by the end of 2023.

In a statement from the Bank of England (BOE), bank Governor Andrew Bailey said that policymakers are prepared to further adjust interest rates in order to
address the fall of the sterling. But the BOE’s next meeting is not scheduled until November 3 and Kwarteng isn’t slated to publish his medium-term fiscal plan until November 23. In the meantime, some economists are projecting that GBP could reach parity with the dollar—a major shift after decades of averaging around $1.50 USD. Whether or not that will happen depends on the U.K.’s fiscal policy response in the coming months.

US Stocks Rally on Rate Hike Slowdown And/Or US 10-Year Treasury Yield Eases to 4.2%

Wall Street rallied after a muted start on Friday, with the Dow adding more than 700 points and both the S&P 500 and Nasdaq up around 2.4% as investors reassessed the outlook for monetary policy. The trigger for the abrupt upside move was a report from the WSJ that showed that some officials are signaling a desire to slow down the pace of the increase soon to gauge the impact of such tightening on growth. The market movement came in tandem with easing Treasury yields, which brought some respite to growth-oriented stocks. Still, volatility showed no signs of abating amid Friday’s $2 trillion options expiration. Meanwhile, a slew of negative quarterly results from corporate America capped gains. Snap crashed 28% after the company forecasted zero growth for the current quarter, triggering a selloff among other social media companies dependent on advertising revenue. All major US indices closed in the green for the week with the Dow gaining 4.9%, the S&P 4.7%, and the Nasdaq 5.8%.

The yield on the benchmark 10-year Treasury note fell below 4.2% from an over 14-year high of 4.3% reached last week, amid hopes the Federal Reserve could slow down the pace of interest rate hikes in the December meeting. The decline followed a report from the Wall Street Journal that some Fed officials are concerned about overtightening. Still, treasury yields remain close to their highest since June 2008, as the central bank is highly expected to deliver its fourth consecutive 75 bps rate hike in November.

The Fight For 30,000 Points In Rhe Dow Jones Stock Market, The Holding Of The 110 Points In The USD Index,
And Or The Meanwhile 4% In The 10year US Yields – That’s Seems What Determines The Price Action At The Moment! Or?

That´s why stay cautious about the stockmarket! And only get in with a concrete competente long tactic, short tactic, and/or concrete competente short/long tactic – in these historically very volatile price action times! Even like with our neutral long/short 4XSetUp trading capabiliy switch trade in the DOW Future…

DXY Weakens Toward 112

The dollar index pulled back toward 112 on Friday and was on course for a 0.8% weekly drop, as investors scaled back bets on aggressive monetary tightening after a WSJ report saying that some Fed officials are concerned about overtightening with large rate hikes. The Federal Reserve is still expected to lift the fed funds rate by 75 bps in November, the fourth straight rate hike of that magnitude, but the December increase could be smaller. Philadelphia Fed President Patrick Harker said the central bank is likely to raise rates to “well above” 4% this year and hold them at restrictive levels for a while.

However, ut will be a busy week in the US with earnings reports, preliminary estimate for Q3 GDP growth, durable goods orders, and flash PMI readings taking central stage. Also, investors will closely follow central bank meetings in Euro Area, Japan, Canada, Brazil, and Russia and fresh Q3 GDP growth figures for China, Germany, France, Spain, and South Korea. Finally, flash PMI figures for Euro Area, UK, Japan, and China should provide some insights into the economic activity in October.