The Dollar Forecast: Don't Count On A Dovish Fed

March 2, 2022

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The Dollar, It Retraced Itself
The DXY Subject field Analysis: Ranges Rule, The Next Leg Is Probably High

The Dollar mark, It Retraced Itself

The dollar index has conferred up all but the last trivial bit of its 2022 gains. The move is driven away an exploding first moment the FOMC will cut rates this twelvemonth and that expectation founded on the coronavirus. The coronavirus is spreading approximately the world, mark my speech, the Wuhan Flu is future to a neighborhood almost you. But it's not that big a deal, not really. No longer than a bad case of the flu the general is mostly expected to run its course and then we'll wholly be back to business. The biggest threats are to corporate earnings and GDP maturation.

The Fed, for its part, is still data driven and the data is right, the U.S. economy on solid footing despite ii eld of trade war. I've non know the Fed to act pre-emptively ever so the promise they will try to front-run viral impact to the U.S. economy is misplaced. At to the lowest degree in my sentiment. This week we may pick up things alter, there is quite a bit of information connected tap, but I assume't think it will support the idea of 1 some fewer 3 FOMC rates this year.

Superior the list is the Ecru Book. The Chromatic Book report is due out on Wednesday, it is a summary of efficient activity crosswise the 12 Federal Second-stringer operating regions. They key information inside this report will be the DoL data. The Fed has been reporting tight labor conditions, shortages of workers, and rising wages for umteen quarters. If that changes we may be in for a deep securities industry correction and contraction of the one dollar bill simply I don't think back so.

On with the Beige Al-Qur'an is the unit of time labor data bundle including the ADP, Rival, and NFP reports. These should show job gains, unemployment, and reward on trend if non fast. Thereupon scenario in caper, the outlook for the FOMC and order cuts is going to change and that I consider will put a bottom dorsum in the buck.

The DXY Technical Analysis: Ranges Prescript, The Next Leg Is Probably High

The DXY drop approximately -3.0% over the last week as traders flooded into prophylactic-havens like metallic and the hankering. This move has erased nearly all the 2022 gains but has non broken support. My superfine support target is near $97.12 and, until now, buyers are holding prices well above that level. The daylong-term trend in the one dollar bill is sideways. The $97.12 level is near the inferior of the long-term order so I expect IT to take and confirm as support and steer of about-face. That could hap this week atomic number 3 the data is discharged so traders are cautioned to not get overly bearish with thier dollar trades this week.