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The extraordinary stimulus measures in the US could undermine confidence in the greenback if inflation takes off



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Billionaire US fund manager Stanley Druckenmiller delivered an apocalyptic warning earlier this month that the dollar could cease to be the predominant global reserve currency within 15 years.


“I can’t find any period in history where monetary and fiscal policy were this out of step with the economic circumstances,†the chief executive of Duquesne Family Office declared.


He is not alone in expressing concerns about excess US demand, a more inflationary environment and accompanying dollar weakness. Such worries have been a contributory factor in the jittery equity markets of the past two weeks.





i guess a lot of "old time" people here knew this , but USD still standing like strong cowboy....... :B):

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US Dollar


There continues to be some demand near 90. Given its round number significance and that the zone held twice prior in 2021, this is understandable. But there’s also ample supply up near the 91-91.5 zone, which may slow down any true bounce attempt.




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What is driving the US Dollar higher?: DXY


With the possibility of a stronger than expected NFP print for May, the DXY has gone bid on taper hopes.


The US Dollar Index (DXY) was on a tear today. The US session began with the DXY selling off after Russia announced that they were exiting US Dollars from their Sovereign Wealth Fund. However, that move later reversed, and the DXY turned sharply higher with a better than expected ADP Employment Change figure for May, as well as, with a better than expected initial Jobless Claims figure for the week ending May 29th. Expectations for tomorrows Non-Farm Payrolls for May are +645,000. ( See Matt Weller’s complete NFP Preview HERE). But if good jobs numbers mean a stronger economy, wouldn’t that mean stronger stocks and a weaker US Dollar?


By now you know the story: better data means there is more of a chance that the Fed may do more than just “Talk about talk about tapering”. The worry is that with a better print, the Fed will announce tapering at their June meeting in 2 weeks. Tapering, or decreasing their $120 billion of bond purchases per month, would mean lower bond prices and higher yields. In addition, less support from the Fed would also mean lower stock prices and a higher DXY.


However, the risk for the NFP print is twofold:


1) it is weaker than expected


2) there is a large revision from the horrible April print (+266,000)


We also need to pay attention to the average hourly earnings figure. With higher inflation data lately, the Fed will want to make sure that inflation is feeding through to the employment data before they do anything. They have consistently said that they want to see a string of months of improvement in the labor market, which includes increases in pay. Expectations are 0.2% for May.


After moving lower for most of 2020, DXY bounced for almost the entire first quarter of 2021. Thus far in the second quarter, the DXY has been moving lower. After hovering around the 200 Day Moving Average near 91 at the end of April/beginning of May, price continued lower in a descending wedge formation. Price broke above the wedge on May 27th, and today, finally accelerated higher away from the wedge. The DXY traded to horizontal resistance today near 90.59.


With the possibility of a stronger than expected NFP print for May, the DXY has gone bid on taper hopes. Of course, the other reason for the bid could simply be profit taking ahead of the data, as the US Dollar has been falling since the first day of Q2. Watch for revisions to the April print, as well as Average Hourly Earnings for a better gauge on market direction ahead of the Fed in mid-June.




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hi eb . I came across this , which is amusing and sadly too true


The RMB can appreciate or depreciate. No one can accurately predict the exchange rate. No matter if it is short term or long term it is certain that predictions of the exchange rate will not be accurate.


No matter if it is the government, institutions, or individuals, all should avoid being misled by predictions.


Amusingly enough the author, the Peoples Bank of China, then went on to predict that the exchange rate would be stable.

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Amusingly enough the author, the Peoples Bank of China, then went on to predict that the exchange rate would be stable.




hi nipper

think of what RBA and Fed and all other major central bankers talk, have you see any difference??? they all the same!! jaw bone !! :lol:


to be honest , NO ONE here can predicting any currency's movement. if someone does, then he/she will be supper rich!! :lol:


best we can do is to do "educated guess" and with stops in hand[ prepare to be wrong]


financial system in china is different to amarica, but every country is different i guess. just need to understand how it works, then place a trade to profit from it!![ if one can profit from it. :lol:


all IMHO. though. without political bias !!



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  • 3 weeks later...

It’s a new trading week and risk assets are bouncing back from last week’s big selloff. Some less-hawkish-than-feared comments from the Fed on an otherwise quiet day are garnering headlines, though a general sense of optimism over the official start to summer certainly isn’t hurting matters!


Of course, that summertime feeling only applies to the Northern hemisphere, and Australian dollar bulls have seemingly gone into hibernation for the Southern hemisphere winter, today’s price action notwithstanding. Looking at the chart of AUD/USD, rates broke down to a fresh year-to-date low Friday, slicing through their 200-day EMA in the process. Whether you view it as a “generic rounded top” pattern or a messier head-and-shoulders” setup, the price action over the last six months reflects distribution from buyers to sellers and will be difficult to rally back above any time soon.




its breakdown below 0.7560 support. This breakdown-retest pattern is a common setup that allows bears who missed the initial breakout a secondary opportunity to enter short positions as long as rates remain below 0.7560. To the downside, the next logical level of support to watch will be previous-resistance-turned-support near 0.7400.


With a lackluster Australian retail sales report (0.1% m/m growth vs. 0.4% expected) already behind us, these are the other economic releases for AUD/USD traders to monitor this week:




don't forget to set stops if one trade it same way!!

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The US dollar index (DXY) printed a small Doji (inside candle) to show volatility remains capped ahead of CPI data tonight therefore expect to be in for a quiet Asian session due to lack of top-tier data scheduled for currency markets.




think of AUD gonna back to 0.7650ish soon. :unsure:



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The US dollar index has formed a double bottom pattern at 91.5 with two bullish hammers (with the more recent one finding support at its 50-bar eMA on the four-hour chart). A break above 91.60 confirms the pattern and the measured move of the pattern projects an initial target around 92.30. Incidentally, this is right near the 50-week eMA which has capped as resistance for the past two weeks.


However, given there is very little in the way of news scheduled for today then its entirely possible we may lack the catalyst for a sustained breakout. In which case we would then monitor its potential for a triple bottom. Ultimately, our bias remains bullish above 91.50.



i for one not as bullish as this analysis for DXY [us dollar ], it just too much of uncertain things up in the air, that could push the USD around [up and down]

imho thought!!

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With the RBA meeting and Australian retail sales on tap, it’s worth checking in on AUD/USD. The currency pair tagged a fresh year-to-date low around 0.7450 Friday before bouncing back above 0.7500 as of writing. More generally, rates spent the entire first half of the year forming a large “rounded top” or “complex head-and-shoulders” pattern; either way, it’s clear that the longer-term trend in AUD/USD has shifted from bullish (higher highs and higher lows) to a downtrend (lower highs and lower lows). Moving forward, the key levels to watch will be previous-support-turned-resistance at 0.7590 and previous-resistance-turned-support at 0.7400, with a general bearish bias toward that support level.


With earnings season and economic data projected to pick up in earnest after this coming week, it’s a great time to review longer-term charts and themes to ensure you don’t get caught up in the day-to-day deluge of information in the coming weeks.



use TA to trade it even for shorter term. think it will be getting wild gyration this week!! imho



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