{"id":21747,"date":"2024-04-24T07:30:40","date_gmt":"2024-04-24T11:30:40","guid":{"rendered":"https:\/\/www.jeffclarktrader.com\/?p=21747"},"modified":"2024-04-24T07:30:40","modified_gmt":"2024-04-24T11:30:40","slug":"which-way-will-the-dollar-go","status":"publish","type":"post","link":"https:\/\/jeffclarktrader.com\/market-minute\/which-way-will-the-dollar-go\/","title":{"rendered":"Which Way Will the Dollar Go?"},"content":{"rendered":"

The markets have fallen for it yet again.<\/p>\n

“Fool me once… fool me twice…”<\/p>\n

At this point, we’re losing count over how many times the Fed has fooled us all.<\/p>\n

Almost exactly one month ago, the Fed reiterated its view that it would cut interest rates three times sometime this year.<\/p>\n

But now, things are looking very different.<\/p>\n

Greater Confidence<\/h2>\n

In Fed Chairman Powell’s own words, “The recent data have clearly not given us greater confidence and instead indicate that it’s likely to take longer than expected to achieve that confidence.”<\/p>\n

Powell, of course, is talking about when the Fed might be ready to deliver on its long-awaited rate cuts.<\/p>\n

And while every market is impacted by the Fed’s monetary policy, one of the most important of those markets is the U.S. dollar.<\/p>\n

The dollar has been on a tear since March 8. The dollar index (DXY) has risen as much as 3.50% since then.<\/p>\n

So will the dollar continue to strengthen, or is it getting ready for a dramatic reversal?<\/p>\n

There are a few clues we can look to in order to try and answer this question.<\/p>\n

I’ve prepared an updated price chart of DXY below. Check it out so you can see the key technical parameters that will help traders with the future direction of the dollar.<\/p>\n

<\/p>\n

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

As we can see, DXY has reached the upper boundary of a parallel trend channel.<\/p>\n

This means the dollar is at a critical juncture and one of two things is about to happen.<\/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

Two Paths for the Dollar <\/h2>\n

The first possibility is that the upper boundary line of this channel will serve as strong technical resistance, ultimately sending the dollar much lower.<\/p>\n

In this case, we shouldn’t expect DXY to rise above 107, the previous swing high from October 2023.<\/p>\n

The second possibility is that DXY will break strongly through the top of this parallel channel.<\/p>\n

If this were to occur, then we should look for further dollar strength. This would mean a breakout beyond the October high of 107.<\/p>\n

Right now, the dollar is trading according to the market’s expectations for what the Fed may or may not do when it comes to interest rates.<\/p>\n

We should keep a close eye on the technical parameters we just went over.<\/p>\n

If the market respects this parallel channel, then it’s likely that dollar weakness will coincide with inflationary reports coming in cooler than expected.<\/p>\n

On the other hand, if the current trend of hot inflation reports continues, we should look for further dollar strength and an eventual break above that 107 high.<\/p>\n

Happy trading,<\/p>\n

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

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

The markets have fallen for it yet again. <\/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-21747","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\/21747","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=21747"}],"version-history":[{"count":0,"href":"https:\/\/jeffclarktrader.com\/market-minute\/wp-json\/wp\/v2\/posts\/21747\/revisions"}],"wp:attachment":[{"href":"https:\/\/jeffclarktrader.com\/market-minute\/wp-json\/wp\/v2\/media?parent=21747"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/jeffclarktrader.com\/market-minute\/wp-json\/wp\/v2\/categories?post=21747"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/jeffclarktrader.com\/market-minute\/wp-json\/wp\/v2\/tags?post=21747"},{"taxonomy":"publication","embeddable":true,"href":"https:\/\/jeffclarktrader.com\/market-minute\/wp-json\/wp\/v2\/publication?post=21747"},{"taxonomy":"person","embeddable":true,"href":"https:\/\/jeffclarktrader.com\/market-minute\/wp-json\/wp\/v2\/person?post=21747"},{"taxonomy":"newsletter-type","embeddable":true,"href":"https:\/\/jeffclarktrader.com\/market-minute\/wp-json\/wp\/v2\/newsletter-type?post=21747"},{"taxonomy":"ticker","embeddable":true,"href":"https:\/\/jeffclarktrader.com\/market-minute\/wp-json\/wp\/v2\/ticker?post=21747"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}