US Dollar Index (DXY) Analysis Thursday, April 1

US Dollar Index (DXY) Analysis Thursday, April 1

The US dollar index is experiencing a corrective trend after reaching its highest annual level in the range of 93.4 to 93.5 units.
Although in the short term the trend is still bullish, but as we approach the buy saturation zone, there is a possibility that the index will fall to the level of the 200-day moving average indicator in the range of 92 units.
If the index can maintain its position above the level of the 200-day moving average indicator, then we can expect the index to grow in the short term.

Technical levels
Last level of the day: 93.13
Daily fluctuations: 34 pips
Daytime fluctuations (٪): 0.17-
Start: 93.29
Trends
20-day moving average: 92.06
50-day moving average: 91.17
100-day moving average: 91.05
200-day moving average: 92.53
Levels
Yesterday's highest level: 93.35
Yesterday's lowest level: 92.88
Last week's highest level: 92.92
Last week's lowest level: 91.71
Last month's highest level: 91.6
Last month's lowest level: 89.68
Fibonacci 38.2. Daily: 93.17
Fibonacci 61.8. Daily: 93.06
Pivot S1 Daily: 93
Pivot S2 Daily: 92.7
Pivot S3 Daily: 92.52
Pivot R1 Daily: 93.47
Pivot R2 Daily: 93.65
Pivot R3 Daily: 93.94

Fundamental analysis of the euro Tuesday, March 9

Fundamental analysis of the euro Tuesday, March 9

Last week, almost all European Central Bank officials warned that the ECB should respond to rising bond yields. The growth of European bond yields is due to investors' fear of inflationary pressures that will emerge after the recovery of the global economy. From a fundamental analysis point of view, it is very unlikely that the European Central Bank will reduce interest rates or tighten expansionary monetary policy at this week's interest rate meeting. But the recent jump in European bond yields (especially the 10-year German government bond yields) could force the European Central Bank to make a small change in monetary policy and perhaps increase bond purchases to prevent further growth in bond yields. Give. The slope of the German government bond yield curve has recently widened, worrying European monetary policymakers.
A member of the board of the European Central Bank (Fabio Panetta) said last week that the sharp rise in the yield curve is an unfortunate event that the European Central Bank should stop growing as soon as possible by increasing the volume of bond purchases. The head of the French central bank also said that the rise in bond yields is unjustifiable and the European Central Bank (ECB) must deal with it. Most members of the European Central Bank seem to agree with the increase in the volume of bond purchases under the PEPP program.
Undoubtedly, the increase in the volume of bond purchases by the European Central Bank will be to the detriment of the EURUSD currency pair. Data on the volume of European Central Bank bond purchases will be released on Monday. On the other hand, if the volume of bond purchases does not change, the euro will strengthen. In that case, the euro trend will depend on the words of the head of the European Central Bank.

The initial reaction of the dollar and the US stock market to the approval of the financial package

The initial reaction of the dollar, the Treasury and the US stock market to the approval of the financial package

Investors are keen to buy and hold US dollars. In global markets and this month, the US dollar index has climbed to its highest level in four months. The US Senate has approved Biden's $ 1.9 trillion bailout package, and the House of Representatives is expected to approve it today and sign it by the end of the week.
Under a previous US government support program, $ 600 in subsidies were able to support US retail and consumer spending. This time, a $ 1,400 support payment is planned and is expected to support the US economy more than ever. According to the US government, approximately 98% of those who received the $ 600 payment will also receive the $ 1,400 government payment. In the meantime, the benefits for the unemployed have been extended. US government support, along with widespread vaccination in the United States, will support the US economic recovery.
Yesterday, the US stock market showed a vague performance in response to the approval of the government financial package. While the Dow Jones industrial average rose, the S&P 500 and NASDAQ stock indexes fell. It seems that in the current situation, investors are not interested in buying shares of technology companies. The US dollar has also reacted positively. US 10-year Treasury yields also rose above 1.60 percent. From a fundamental analysis point of view, the US dollar is expected to continue to grow and the main focus of the market will be on US inflation indicators. US inflation data will be released on Wednesday. Given that energy prices rose sharply in February, US inflation data is expected to be stronger than market forecasts.

Review of Apple Stock Performance (AAPL) on the last trading day

Review of Apple Stock Performance (AAPL) on the last trading day

Shares of Apple Corps (NASDAQ: AAPL) closed up 0.12% at $ 129.87 on the last trading day. The overall stock market followed an uptrend on Friday, with the Nasdaq Composite Index (COMP) rising 0.07% to 13,874.46. The Dow Jones Industrial Average (DJIA) closed unchanged at 31,494.32. Friday's uptrend offset the three-day decline in Apple shares. On the other hand, Apple shares closed $ 15.22 lower than their highest 52-week high ($ 145.09) on January 25.
Let's compare the performance of some of Apple's competitors. For example, the stock of Microsoft (MSFT) fell 1.16% to $ 240.97. Alphabet (GOOGL) fell 0.81% to $ 2,088.81 and IBM fell 1.44% to $ 118.99.
Apple stock traded at $ 86.8 million, down $ 16.5 million from its 50-day moving average ($ 103.3 million).

Fundamental analysis of the Forex market and the European stock market Friday, February 19

Fundamental analysis of the Forex market and the European stock market Friday, February 19

European stock indices have halted the longest downward trend since October. Investors are evaluating the vague financial statements of corporations. Meanwhile, the price of crude oil has fallen.
The Stoxx Europe 600 stock index has reopened from a positive range. The S&P 500 futures index has not changed significantly and the Nasdaq 100 futures index (NASDAQ) has grown. However, there are no clear risk flows in the market. But the US dollar has weakened in the Forex market. Meanwhile, the yield on 10-year US Treasury bonds has returned to 1.3 percent and the main focus of investors is on the financial statements of corporations. From a fundamental analysis point of view, the growth of Treasury yields should be to the detriment of the stock market, but this has not yet happened. There is a misconception in the financial markets. Many market participants assume that interest rates will remain close to zero percent forever. But given the growth in long-term bond yields, this seems to be a misconception. This means that stock market investors may face this fact in the near future and exit the market.
Recent economic data show that the global economic recovery is weak and fragile. The UK retail index has fallen sharply, contrary to market expectations. In the crude oil market, the price of light crude oil (WTI) has fallen below $ 60. The US government has stated that it intends to negotiate with the Iranian government. Oil investors believe that easing tensions between Iran and the United States could increase global crude oil supplies.

What is an NFP Employment Report?

What is an NFP Employment Report?

The US NFP Report is the most important economic report for global financial markets. Employment changes in the US non-agricultural sector affect the Forex market and even the stock market every month. This report will be published on the first Friday of the month. In this article, we want to learn more about this report and at the same time examine how to analyze and use NFP in transactions.
NFP letters are derived from Non-Farm Payroll. This employment index is one of the most important economic reports in the United States, and usually all investors and market participants try to make a profit by predicting the possible outcome of this report. The NFP Employment Index covers the number of jobs created in the past month in the US non-agricultural sector. Changes in non-agricultural employment can provide a good picture of the health of the US economy.
Why is NFP reporting important for Forex traders?

The US labor market is highly correlated with consumer spending. The more jobs created in a month, the higher the level of consumer spending. In fact, when the monthly employment growth in the United States is strong, investors also expect the consumption of American households to increase. An increase in consumer spending will eventually lead to an increase in GDP. At the same time, the United States has extensive trade relations with other global economies. This means that American households and consumers are one of the main customers of goods and services produced in other global economies. So when US employment growth is strong and consumer spending rises, so does the subconscious demand for goods and services in other global economies, which contributes to global economic growth.
How to interpret the US NFP report?

The forecasts and expectations of economists, investment banks and micro-investors are usually collected and displayed in the Forex economic calendar before important economic reports are published. In the economic calendar of Forex Iran Bourse Online, you can see the time of publication of the NFP report, the previous value of the index, the forecasted market value and the real or current value of the NFP index.
Usually, to interpret the US NFP index, three scenarios have to be considered:

    The NFP is in line with market forecasts: In this case, the market does not react seriously to the report.
    The NFP outperforms market forecasts: This is a bad sign for the US economy and usually has a negative impact on the US dollar. Poor US employment growth can lead to recession (Note: If strong risk aversion is not present in the market, the dollar will usually react negatively to the decline in the NFP index. But if strong risk aversion is present, the US dollar due to Safe and valuable assets will be strengthened).
    The NFP is better than the market forecast: Strong US employment growth is a positive sign for the US economy and can support the US dollar.

It should be noted here that the degree of deviation of NFP data is very important with market forecasting. The greater the deviation between market forecasting and actual data, the more severe the market reaction to the NFP index.
Example:

The release of the US NFP Index could severely shake the Forex market. But there are times when the market does not respond to the report at all. Why? Suppose the market predicts that US NFP employment growth will be 100,000 units. Let us now consider three possible scenarios at the time of the release of the NFP Index:

    According to market expectations, the index shows a growth of 100,000 units of employment.
    Contrary to market expectations, the index shows a growth of only 50,000 units.
    Contrary to market expectations, the index shows a growth of only 150,000 units.

In the first scenario, because the market was ready to grow 100,000 units, the dollar and the Forex market did not react seriously. The report was allegedly leaked to the market.
In the second scenario, the market is shocked. Because US NFP employment growth was 50,000 units lower than expected. Poor US employment growth means poor performance of the US economy, weak inflation growth, declining consumer spending and no need to raise interest rates. So the dollar will react negatively to it.
In the third scenario, the market is shocked. But because the NFP data was much better than market expectations, everything is going to be in the US economy and dollar.

Fundamental analysis of the US dollar

Fundamental analysis of the US dollar

Why does the US dollar index not fall?
While we have seen a steady decline in the US dollar index over the past ten months, last week's fluctuations have shown how the US dollar will strengthen. Investors are flocking to US Treasury securities as volatility intensifies and risk aversion flows across markets. Last week, the VIX index recorded its highest overnight jump in three years. The index reflects the fear of US stock market investors.
Risk aversion supported Treasury bills and the US dollar. Also, from the beginning of 2021, we are witnessing the formation of a price floor in the US dollar index. The US dollar index is looking for a price floor as the Dow Jones, S&P 500 and NASDAQ stock indices have risen during this period. The reason for the US dollar index floor is changes in the rate of return on treasury bonds. The market has long focused on changes in Treasury bond yields. Biden's new financial package has boosted Treasury yields. Rising Treasury yields and the Federal Reserve's gradual exit from expansionary monetary policy could benefit the US dollar. That is why the US dollar index has been able to maintain its position for now.
It is unclear whether Biden's $ 1.9 trillion financial package will be approved by mid-March. The size of this package may also change. This means that investors may be disappointed in the medium term. Meanwhile, the entry of micro-investors into the shares of companies that have recently been sold by mutual funds (Short Sell or borrowing sales) has caused a heavy loss to investment funds, which may cause them to go bankrupt. Bankruptcy of large investment funds could turn into a new financial crisis in the United States. This week, US dollar traders need to look at US economic indicators in addition to GME and AMC stock fluctuations.

Fundamental analysis of the euro area economy

Fundamental analysis of the euro area economy

The European Central Bank (ECB) held a meeting last week without any changes in monetary policy. However, members of the European Central Bank are expected to prepare the market for monetary policy changes in the coming weeks. At present, the European Central Bank deposit rate is negative 0.5 percent and it is clear that there is no room for further interest rate cuts. In terms of the market, the chance of interest rates falling to minus 0.6 percent by the end of 2021 is almost 70 percent. However, if the European Central Bank officials point to a reduction in interest rates in the coming days, the euro will weaken. However, the downward movement of the EURUSD pair may be limited.
From a fundamental analysis point of view, lower interest rates could not have a significant positive effect on the euro area economy. In addition, the European Central Bank has focused on the fluctuations of the EURUSD currency pair. If the euro strengthens, the eurozone's economic recovery will be hampered. But a weakening euro could support the eurozone's export-oriented economy. The fact of the matter is that the European Central Bank is a long way from intensifying monetary expansionary policies, and the market knows this. In addition, the European Central Bank opposes the strengthening of the euro. Therefore, perhaps any change in interest rate expectations will have a limited effect on the EURUSD pair.
As interest rate expectations do not have a significant impact on the market, euro area economic data is expected to have a similar effect. However, new euro area GDP data will be released this week. Below are the inflation data. At the end of the week, the final assessment of PMI, unemployment rate and retail index will be published.

Review of the Dow Jones index-January 30

Review of the Dow Jones index-January 30

 

The support and resistance ranges of the Dow Jones index are shown in the figure. If either fails, the next targets (both support and resistance) will be available.

Be Different ...

Hamid Rahathagh

 

What is the dollar index?

What is the dollar index?

The US dollar index consists of the geometric weight average of a basket of foreign currencies against the dollar. This is very similar to how stock indices work in that it provides an overview of the value of a portfolio of securities, the securities we are talking about here are other major currencies.
Basket

The US dollar index consists of six foreign currencies, which are:

    Euro (EUR)
    Yen (JPY)
    Pond GBP
    Canadian Dollars (CAD)
    Krone (SEK)
    Franc (CHF)

There is an interesting question here, if the index is created from 6 currencies, how many countries does it include?

If your answer is 6 you are wrong.

If your answer is 22 you are a genius.

There are 22 countries, as there are 17 EU members that have adopted the euro as their currency, plus five other countries (Japan, Britain, Canada, Sweden, Switzerland) and their associated currencies.

It is clear that 22 countries make up a small part of the world, but many other currencies follow the US dollar index very closely. This makes the USDX a good tool for measuring the global strength of the US dollar.
USDX Components

Now that we know what a portfolio consists of, let's get to the (geometric weight average) section. Since not all countries are the same size, it is fair to give each one a proper weight when calculating the US dollar index.

In 17 countries, the euro is a large part of the US dollar index. Next is the Japanese yen, which makes sense because Japan is one of the largest economies in the world. The other four countries make up less than 30% of the USDX.

Here's something interesting: When the euro falls, which one might cause the US dollar index to move?

The euro is also a large part of the US dollar index, we can call this index (anti-euro index). Since the USDX is strongly influenced by the Euro, people are looking for the dollar index (they are the most balanced). More information is provided below, first let's look at the charts!

Use USDX in Forex

How do you probably think I can use the dollar index in my trading system? Well be patient, we all know that many highly traded currency pairs include the US dollar, such as EUR / USD. USD / JPY. USD / CHF. GBP / USD. USD.CAD, in fact, often USDX provides a better picture when the market outlook for the US dollar is unclear. In the wider world of Forex, the USDX can be used as an indicator of the strength of the US dollar, since the USDX is more than 50% formed by the euro area and is quite inversely related to the EUR / USD.
This is like a mirror image! If one goes up the other is likely to go down. If the USDX is making significant moves, you can almost certainly expect currency traders to react to it. In short, currency traders use the USDX as a key indicator for the direction of the USD. use.