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Macroecomonics

Pay Attention! The US Dollar is at a very important price point!Happy start to 2021 Friends! I hope this chart finds you having a blessed start to the year. I'm sure we have all heard the expression, old resistance turns into new support. Well this has indeed particularly been the case in the dollar, and the visual of it becomes distinct when we overlay the dollar on a monthly TF with our Fibonacci levels. This analysis took a great deal of research to put together so please be sure to like & comment if you found this content resourceful! We see a few things here observed within the chart: • We are at a massive make or break point on where the dollar is headed • We have arrived at a long time support/resistance level on a high TF • The ema trend is clearly bearish • Bear flags forming again on the daily TF • Commodities and equities and crypto are all continuing to rise in value relative to the devalued US Dollar • US Dollar was moving in a rising channel however all the stimulus has resulted in it knocking back to 2018 lows/ 2009-2010 highs. The theory of a 'deflationary' environment I think at this point is totally out of the question. I personally imagine the dollar to continue to erode away after a small bounce here on long term support, until we finally see the Fed raise rates. Until rates are raised I imagine this will continue to drop. I have read and am well aware of the fact that "QE did not create inflation", and I can certainly agree QE did not create hyper-inflation like all the Austrian economist were preaching - however inflation is certainly occurring and I think the best place to get the most real gauge on inflation is to see the yield on stable coins - coins pegged to the USD - especially credible ones like USD Coin backed by Visa. If you think, "well that is fringy Zen" - then you have your head in the sand because as of this week "US Banks can now Run Nodes for Stablecoins" - this essentially enables financial providers to use a better, safer, faster product then the legacy ACH /SWIFT process of yesterdays. Citation of this available below. So why does this matter to you as an individual? The biggest and most shocking reason in my opinion is the yield on these stable coins and if I shop around and look on different platforms with different cryptobrokers like Coinbase, Binance we see some modest yield, but some DeFi platforms like Yearn.finance & Zerion what we see the market rewarding dollar 'hodler's' with is shocking: • USD Coin: 6-13.31% • DAI 14.6-18% • USDT 7.6-11.03% (Yes the infamous tether has LOWER yield then the Visa backed play) • TUSD 3.6% • WBTC 0.0653% I am NOT recommending you do anything at all or invest in any of these things, I think the dollar is going to find temporary support and then sell off very slowly over potentially years until the Fed raises rates. I anticipate rates will be raised to combat inflation in 4 years. My point in bringing this up is the new indicator we have available for gauging inflation by looking at the yield of the USD itself. The implications as far as I can see, especially with the added institutional adoption is that the USD is currently experiencing very real inflation that is much higher than the 2% target we are hearing about in FOMC meetings. I believe the yield provided holding these stable US Dollar Coins is a great new indicator for the actual inflation the dollar is facing. I am not recommending buying them or anything, but rather want to clarify that there importance is in utilization as a new indicator. I likewise believe we need to pay heed to the amount of risk at play when we look at fixed income yield relative to yield in holding a product in parity with the USD. Within my bond portfolio, was taking on risk in American Airlines for a 8% yield, and Delta yielding 7%, FedEx 2%! The amount of risk in those bonds is far higher then the USD itself. I feel like these new products will be very disruptive to traditional finance. For those wondering, and I made the comments in earlier ideas below, but I closed the entire bond portfolio and moved it into ETH throughout the month of October-November. Dare I say it, at the start of 2020 in need of some liquidity I was in a 3M CD offering a rate of 0.2% (this was to help with the inflation bite). Keep in mind this new USDC is compatible with Bank Wires and ACH already. I feel like the infrastructure of this all was built so swiftly and quietly it crept up on us all fast. This brings up an important concept when looking into the fine print of the Visa/Circle backed digital dollar: "Each digital dollar is backed by cash and short-term US government treasury bonds, not fractional reserve commercial bank money. Reserves are governed by the Centre Consortium" - fascinating right?! "Not fractional reserve commercial bank money." I think this is how we need to realize they are offering this much yield. The structure of the greenback, the engineering itself of it is undergoing an evolution that is clearly spelled out here right off the VISA backed Circle website. I will offer a citation below. There website goes on to say: "Digital dollars like USDC work like other digital content — they move at the speed of the internet, can be exchanged in the same way we share content, and are cheaper and more secure than existing payment systems. We use cloud infrastructure and blockchain networks to scale dollar storage and movement." Please like, share, comment and follow along on TradingView. Please be sure to tell me why I may be wrong friend! If you disagree please kindly let me know what I might not know about and should add to the analysis! I'd love to know how you are strategizing in this environment? Running into gold & silver? Longing energy? Do you think Bitcoin is the destination? Love the TradingView community, and it aids us all when you share your expertise and likes guys! Good fortunes to you dear trader! If you have your own charts on the dollar please share them with me & our amazing community so we can learn together! ___________________________________________ Citation: www.marketwatch.com Again not recommending this to anyone, and this is for businesses not customers even and I am only adding this as a citation for my comment not to market or anything for VISA, it is simply for credibility for the research submitted here: www.circle.com
TVC:DXY
by ZenMode
7
EUR/GBP BULLISH MOVEMENT AHEAD: WEDGE ANALYSISEUR/GBP is preparing to bounce of the lower trend line of the multi-month wedge it has been following since March this year. Before entering this trade, please wait till the bounce has been confirmed. Your risk-reward ratio may be lower than entering the trade straight away, but winning a small trade is better than not winning at all. Keep an eye out of the red marked area, since it functions as a major resistance. In case of a major Brexit related news, expect the wedge to be broken. Example: a no-deal brexit would lead to a break of the wedge on the upper side. Keep macro factors in mind when trading!
Long
by FieryTrading
Weekly Review: Clueless Territory (Read for Fundamentals)Will have a week similar to the last one, irregular. We had a decent run in the last couple weeks, and now the market is starting to feel a bit clueless, why? - American elections are approaching - Disappointing news about vaccines development - Bad Brexit negotiations - Worse control of the virus than expected However, the underlying sentiment of the market is bullish. - 2021 & 2022 will be years of +20% earnings growth and this will guide the markets This week: - Technology earnings results (which will be decent and sustain the markets) - Stimulus package talks will advance Markets will move laterally keeping an eye on both earnings and stimulus package while waiting for the outcome of the elections, if anything they will end slightly up this week.
CME_MINI:ES1!Long
by PepeMafia
GBP Market Commentary - Pound Under PressureFundamental Analysis: UK Economy currently holds a significant current account deficit of £21.1 billion (Q1 2020) or 3.8% of GDP Indicates a substantial deficit of savers, the UK economy is therefore in need of international savers to plug the gap, however international savers are only willing to come in when there is a strong fundamental outlook. Over the past few years, investment into the UK as a percentage of GDP has dropped significantly, dropping below France and Germany, highlighting investors are not liking what they see, i.e too much political uncertainty! Continued uncertainty leads to a further reduction in investment flows leading to potential downward pressure on the value of sterling. The political and economical future of the UK is looking anything but certain. UK Health Secretary recently warned the UK is at COVID tipping point, with a recent rapidly rising rate of infection, forcing pressure on the Govemernet to introduce further tough nationwide restrictions in a desperate attempt to avoid a 'disastrous' second lockdown. Further uncertainty over Brexit has also reached a critical point. Boris Johnson latest manoeuvres led to a full-scale rebellion by Conservative MPs and widespread recriminations over his plan to break international law. Technical Analysis: The GBP/USD looks to be currently undergoing an ABC correction to the downside after an impulsive leg recovery following the initial COVID sell-off. A daily close below June highs of the 1.28 handle would be significant, a clear indication of the bears fully taking control
Short
by RaphFX
The myth of hyperinflation series- #1 Fed's decisionEven as Fed balance sheet keeps climbing up and U.S takes on more national debt in the current low-interest rate environment, I am not eager to jump to the premature conclusion and entertain the idea of hyperinflation. I'm not saying that it is improbable, I am just saying that it is an unlikely and low-probability event. Yes, it is a fat tail risk that shouldn't be overlooked because it comes with the devastating consequence. However, several conditions and criteria need to be met before we can even realistically begin to talk about the probability of hyperinflation. Federal Open Market Committee's (FOMC) recent decision to keep the fed fund rate unchanged within the target range of 0-0.25% pretty much signaled FED's intention to hold rate effectively to zero until 2022, for at least two years. why? Based on the CPI of the past decade. Since great recession ended in mid-2009, inflation has stayed below 2% for all but two years, therefore; Fed is more worried about disinflationary risk than inflationary risk. Fed's initiative of "average inflation targeting" is determined to hit 2% inflation while keeping the employment low. Since Fed has been missing its inflation goal for a decade, people speculate that Fed may let the inflation run up to 3% or 4% to make up for it being below 2% for so long, thus triggering and opening the doorway to the potential hyperinflation. While such theoretical risk is not completely unfounded, the fact remains the same that we need to have the inflation first before we can have hyperinflation. Next, we will look at Fed's tools and to what extent Fed can influence the market.
TVC:DXYEducation
by Libratus
4
GS Goldman - Where is it heading?We are at ascending channel but key support area we break down further out of the bullish moment - we will have the bears come out...! Now, I was very bullish on banks overall - even when they had there earnings. For this moment time technical aspects lets concentrate - if we go further below our next support area would be: 193 - 188 areas & Resistance areas would be: 219-225 areas. Go through lower time frames once direction is confirmed, you could even add alerts to your charts or if you're feeling very confident add orders in. Enjoy - have a great weekend.
NYSE:GS
by Trade_Journal
Silver - Are you suffering from FOMO?Key word right now that I want you to keep in mind - Inflationary. Why? That's the period we are going through, when this occurs you can tell metals rise, check out copper, gold, platinum ...the list is endless...! I can go on about various other instruments too. We could even go back to 60/70's Want to know further in depth what happened then - message me privately! But let's go to the technical aspects for a moment to make it simple: Are you suffering from FOMO (Fear.Of.Missing.Out) Don't jump right into the market - take a step back and think to yourself - Is it a level I want to buy it at? For me it isn't..Why? It's little over extended. Think of trading like a business, you go into a store your favourite designer t-shirt is still to expensive but it's one of those rare limited items which could sell for a lot of money in long run. Right, but you want it at cheaper price, what do you do? YOU WAIT - Patience is key. Wait for that PB (Pull back). Why wait for PB? We want cheaper price, so in this case monthly chart we could head down to areas of 20/21 areas. Then go in, once you're at cheaper price, you sell it once it goes higher - Good risk reward and positive profits! Now I am not here to provide signals so you'd have to do the in depth analyse on short intra-day time frames for yourself but don't suffer the FOMO - get yourself out of mindset of normal retail trader to becoming a professional. Trust your analysis. Enjoy... Remember: Just a trade idea, not a recommendation
TVC:SILVER
by Trade_Journal
2
EUR BUND - What's next?BUND I like to compare the currency euro with its bond market the bund. Why? Simply looking at the macroeconomic front of countries as we had strong PMI's this friday come out from European countries, bunds is focused to Germany which you could of took scalp or swing trade towards the positive outcome. Whilst looking at the fundamental aspects i'd reflect that towards euro currency pair performance with bunds and as well as that start of the week, we had positive aspect of EU recovery fund deal go through. Whilst comparing this, try this with dollar index currency. I find Bonds are more of long term invest in my opinion - My portfolio view overall: Don't put yourself in one instrument, explore wide variety to build a stronger portfolio. Just a trade idea, not a recommendation.
FX:BUND
by Trade_Journal
The best long-term indicatorOne of the main economic indicators for currency valuation is the real interest rate differential between the two countries / currencies. The large flows of fixed income always go to where there is the highest real yield, interest rate discounted from inflation. The carry trade. It is possible to see in the USDCAD example on the graph the great correlation between the interest rate differential and the appreciation / depreciation of each currency. Currently, this indicator does not seem to make much sense due to extremely low inflation and low interest rates in the worldwide. However, the big draw is to know where the economic recovery will be faster, will create more jobs and income, will lead to an increase in inflation and consequently to an increase in interest rates and currency appreciation. Make your bets! I would bet on Australia and Europe, maybe that's why the dollar is so weak.
Education
by blacksheepforex
11
GOLD/SILVER RATIO - What does this mean? SILVER THE NEW GOLD?!It simply means silver is better to buy performance wise than gold. Question is Silver could be the new gold? How & Why? Silver is seen as a better reflationary asset a hedge given from industrial and tech applications Most of half the silver material is used in tech electronics such as connections, wires and jewellery Silver is out performing gold Large institutions think we could get price of 25-30 for silver in the long run. I'd wait for pull back in most of the commodities. Just an idea, not a recommendation.
OANDA:XAUXAG
by Trade_Journal
2