Another 48h - Calm Before The Storm In DXY Today After Yesterday

2024/12/03
Another 48h - Calm Before The Storm In DXY Today After Yesterday
“future of france's prime minister will be decided tomorrow afternoon!
how the eur react? the bonds? is this depressing the stock markets?”



On the eve of the vote on the texts rejecting the Left and the RN, French Prime Minister Barnier, who had borrowed more time than ever, tried one last time this Tuesday evening to convince the opposition not to overthrow the government. And to ask MPs to “give him time”. Despite the almost announced fall of his team, the Prime Minister wanted to call the French to witness by inviting himself to “8 p.m.” (CET) on TF1 and France 2 this Tuesday evening. While the President of the Republic Emmanuel Macron, on the sidelines of his visit to Saudi Arabia, said that he "does not believe in the end of the government" and claimed that he has "confidence in the cohesion of the people", Michel Barnier immediately expressed his wish, to remain in his position and to warn: "If the proposal is accepted, everything will become more difficult and everything will become more serious." There is a risk that Michel Barnier will be overthrown tomorrow, but I don't want to add any more fuel to the fire than my colleagues and/or price action did today. Because I was and am, in this case, once again in line with the statements of French President Macron. But today I didn't want to hold back on the fact that tomorrow the two opposition blocs could actually be overthrown. Which is why Michel Barnier said today, "I hope that the motion of no confidence will not be adopted by the Assembly!".

The New York Stock Exchange ended on a positive note on Tuesday, quite pleased with new data showing that the labor market is in a period of moderate slowdown, paving the way for a rate cut by the Federal Reserve. All of our long 4XSetUps have been chosen so that the Fed will not lower their interest rates. And if so, there should be even more tailwind. So everything was within expected limits, although the DJIA fell slightly today at -0.17%. In contrast to the broader SP500 , which gained a slight +0.05%. And thus has a new historical high for the third day in a row. While the NDX set a second consecutive high today at +0.40%. Although it is clear in my home country Germany that what France fears - namely a new government, new elections in 2025 - our leading German index DAX traded above 20,000 points for the first time, today.

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

This was the learning question of last week. And we have to say very clearly: "It was the bears!" Because on all 5 trading days of last week the bears recaptured the current territory in the DXY . Whether this is a medium-term trend reversal for the coming days, even weeks? Or was it just a week of consolidation to continue rising? That remains to be seen.

“My main concern is with the world order”
George Soros

• Will the bulls recapture the terrain above 106.517 points again?
  
• Will the bears recapture the terrain under 104.447 points again?
  

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. Last week the bears took over. Pathbreaking for this week, maybe even by the end of the year, after DXY closed at 105.782 points last weekend, is even the first annual high of 2024 and/or the upper trend line of the w trend reversal formation with 104.447 points from 2024/08/01. 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 and/or 2023 is continuing. While a price action back below into the w trend reversal formation 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 .


The first uptrend line of this year 2024, from April 16, 2024 with 106.517 points and/or also from May 1, 2024 with 106.490 points, has served as a support zone since Wednesday last week. And that despite trading and/or investing at 105.615 points on Friday, the last low for the time being in the DXY . The downward trend appears to be intact since the beginning of last week, when traders and/or investors sent the price action to the 2024 annual high of 108.071 points. After we had 5 red bearish candlesticks on all 5 trading days last week, the bottom line was that today things went down again over the course of the day - after yesterday the political problems in France seemed almost unstoppable. So all in all, we had only yesterday one green bullish candlestick, of the last 7 trading days. And that's why this first downside trendline could be very important and/or useful as an indication for further price action. But politics in France is more influential - so let's wait for the French parliamentarians' decision tomorrow! "The moment of thruth" as Prime Minister Michel Barnier warns today. So let us think about the price action much more in detail tomorrow...


With best wishes
and with good intentions!
Aaron



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