{"id":21649,"date":"2024-03-13T07:30:33","date_gmt":"2024-03-13T11:30:33","guid":{"rendered":"https:\/\/www.jeffclarktrader.com\/?p=21649"},"modified":"2024-03-13T07:30:33","modified_gmt":"2024-03-13T11:30:33","slug":"the-dollars-big-move","status":"publish","type":"post","link":"https:\/\/jeffclarktrader.com\/market-minute\/the-dollars-big-move\/","title":{"rendered":"The Dollar\u2019s Big Move"},"content":{"rendered":"

On March 4, we wrote about how the dollar is gearing up for its next move<\/a>.<\/p>\n

Since then, the dollar index (DXY) has sold off as much as 1.54%.<\/p>\n

For many stocks, that’s not a big deal. But for the world’s reserve currency? That’s a big move.<\/p>\n

The dollar’s weakness has to do with recent comments by the Federal Reserve.<\/p>\n

On March 6, Fed Chair Jerome Powell testified before Congress.<\/p>\n

Powell reinforced the Fed’s position that interest rate cuts are still likely to come in the following months.<\/p>\n

And because, generally speaking, lower interest rates mean a weaker currency, the dollar bears came out in force.<\/p>\n

Of course, Powell did qualify that any rate cuts would be “data-dependant.”<\/p>\n

That means the Fed wants to see key economic indicators fall in line with their inflationary calculations.<\/p>\n

In other words, the economy needs to cool off a little bit more before the Fed can seriously consider cutting rates.<\/p>\n

A Mixed Reaction<\/h2>\n

In that regard, last Friday’s employment reports were a mixed bag.<\/p>\n

On the one hand, wage growth has slowed. And the pace of job creation, layoffs, and hiring activity also slowed relative to where things were in December 2023.<\/p>\n

But on the other hand, new job openings continue at a blistering pace. In fact, this latest jobs report saw the economy add 75,000 more jobs than most economic analysts expected.<\/p>\n

And just like the data, the market’s reaction was also mixed.<\/p>\n

The dollar initially sold off hard, with DXY dropping by 0.5% in a matter of minutes.<\/p>\n

But by the end of the day, DXY was virtually flat.<\/p>\n

This leaves the dollar in a temporarily uncertain position, just like the Fed’s plans for future rate cuts.<\/p>\n

But just as the Fed will indeed eventually end up cutting interest rates, so too will the dollar eventually fall to new lows.<\/p>\n

<\/p>\n

\n
\n

Free Trading Resources<\/strong><\/p>\n

Have you checked out Jeff’s free trading resources on his website? It contains a selection of special reports, training videos, and a full trading glossary to help kickstart your trading career \u2013 at zero cost to you. Just click here<\/a> to check it out.<\/p>\n<\/p><\/div>\n<\/div>\n

<\/p>\n

Patience Is Key<\/h2>\n

On this price chart of DXY below, you can see how the dollar has now reversed about 50% of the rally that’s taken place since the beginning of the year.<\/p>\n

<\/p>\n

\"Image\"<\/p>\n

My expectation is that DXY will steadily trade lower, eventually taking out the December 28 lows of 100.25.<\/p>\n

But in the short term, we can expect a relief rally.<\/p>\n

The dollar’s had a big move lower over the last four weeks. This has resulted in oversold conditions.<\/p>\n

Currency traders should remain patient with the dollar. Trying to establish short positions right now isn’t the best play.<\/p>\n

Wait for the market to bounce and for those oversold conditions to dissipate. Once they do, the dollar could be ready for its next big move lower once again.<\/p>\n

Happy trading,<\/p>\n

\"Signature\"<\/p>\n

Imre Gams<\/p>\n","protected":false},"excerpt":{"rendered":"

The dollar index has sold off over 1%, which is a big move for the world\u2019s reserve currency. <\/p>\n","protected":false},"author":55,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"ep_exclude_from_search":false,"service":"","footnotes":""},"categories":[1],"tags":[],"publication":[10],"person":[76],"newsletter-type":[],"ticker":[],"class_list":["post-21649","post","type-post","status-publish","format-standard","hentry","category-market-minute","publication-market-minute","person-imre-gams"],"acf":[],"_links":{"self":[{"href":"https:\/\/jeffclarktrader.com\/market-minute\/wp-json\/wp\/v2\/posts\/21649","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/jeffclarktrader.com\/market-minute\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/jeffclarktrader.com\/market-minute\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/jeffclarktrader.com\/market-minute\/wp-json\/wp\/v2\/users\/55"}],"replies":[{"embeddable":true,"href":"https:\/\/jeffclarktrader.com\/market-minute\/wp-json\/wp\/v2\/comments?post=21649"}],"version-history":[{"count":0,"href":"https:\/\/jeffclarktrader.com\/market-minute\/wp-json\/wp\/v2\/posts\/21649\/revisions"}],"wp:attachment":[{"href":"https:\/\/jeffclarktrader.com\/market-minute\/wp-json\/wp\/v2\/media?parent=21649"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/jeffclarktrader.com\/market-minute\/wp-json\/wp\/v2\/categories?post=21649"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/jeffclarktrader.com\/market-minute\/wp-json\/wp\/v2\/tags?post=21649"},{"taxonomy":"publication","embeddable":true,"href":"https:\/\/jeffclarktrader.com\/market-minute\/wp-json\/wp\/v2\/publication?post=21649"},{"taxonomy":"person","embeddable":true,"href":"https:\/\/jeffclarktrader.com\/market-minute\/wp-json\/wp\/v2\/person?post=21649"},{"taxonomy":"newsletter-type","embeddable":true,"href":"https:\/\/jeffclarktrader.com\/market-minute\/wp-json\/wp\/v2\/newsletter-type?post=21649"},{"taxonomy":"ticker","embeddable":true,"href":"https:\/\/jeffclarktrader.com\/market-minute\/wp-json\/wp\/v2\/ticker?post=21649"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}