ATFX FX MarketThe U.S. dollar index continued to trade at 1Nearby, when will there be a breakthrough?
ATFX FX MarketOn December 28 last year, the U.S. dollar index hit 100After the 62 stage low, the ** trend was opened, and the cumulative ** range has reached 2 so far62%, with a maximum of 10383 points. However, most of the time, the band showed the characteristics of **, and only on January 2 and 16 there was a long white candlestick. Since January 17, the U.S. dollar index has hit a high of 10383, with a low touch of 10277, with 103 as the center for sustaining**. It can be seen that although the dollar index is in a state of **, its strength is weak, and it fluctuates sideways most of the time. So, when will the dollar index usher in a breakout? What is the direction of the breakthrough?
First, the Fed's interest rate decision at 3:00 on Thursday was the first turning point. The mainstream expectation is that the Fed will announce that it will maintain the federal interest rate of 55% unchanged, the highlight is Powell's speech half an hour later. Most of the Fed** have expressed their agreement to start cutting interest rates this year, but there is a big difference in the timing of the rate cut. Fed Chair Jerome Powell's statement is crucial, and if the rate cut is acknowledged at this monetary policy press conference and a relatively clear timing is given, the rate cut expectations will be significantly boosted, and the dollar index will quickly break down.
Second, at 21:30 this Friday, the U.S. Department of Labor will release the January non-farm payrolls report, and the seasonally adjusted non-farm payrolls were 2160,000 people, the expected value is 1850,000, expected to decline by about 30,000, means that demand in the U.S. labor market has declined. The previous value of the unemployment rate was 37% with an expected value of 38% and is expected to rise 01 percentage point. The decrease in the number of new jobs and the increase in the unemployment rate mean that there are signs of a recession in the US macroeconomy, and the timing of the Fed's interest rate cut will go further. Based on this, Friday's non-farm payrolls report was released only in time, which was the second important point in time for the dollar index to break downward.
Third, from the perspective of the bond market, the yield of the two-month Treasury bond in the United States is 548%, the yield on the three-month Treasury bond is 537%, long-term Treasury yields are lower than short-cycles, and there is an inversion phenomenon, which means that the Fed will cut interest rates once in 2 to 3 months. Since January 24, the yield of 10-year Treasury bonds has peaked and fallen, the expectation of interest rate cuts has increased, and the probability of the dollar index coming under pressure has increased.
From a technical point of view, the U.S. dollar index is in the stage of the medium-term trend, and the strength of the index is not strong, and most of the time it runs in a state of **. The current market price is in the second round of ** state, and the recent ** has not shown signs of breakthrough. **The reading of the indicator KD is at a relatively high level, and the fast and slow lines are crossed, which means that the short-term directionality is not clear. The bars of the MACD indicator are above the zero line, but the absolute value is constantly decreasing, and the strength is weakening. On the whole, most indicators suggest that ** continues, and it is unlikely that there will be an effective breakthrough in the short term.
ATFX Risk Warning, Disclaimer, Special Statement: The market is risky, and investment should be cautious. The above content is the opinion of the analyst and does not constitute any operational advice. Please do not rely on this report as the sole reference. Analysts' views are subject to change at different times and will be updated without notice.