A Macroeconomic Overview Using Chart Analysis

Dollar index chart with technical analysis (source)For lots of who do not like DXY because it is too narrow (euro 57.6%, yen 13.6% and pound 11.9%), I provide a chart of the trade-weighted dollar that consists of 30-plus currencies consisting of the Chinese yuan and Mexican peso.In the below chart, we see the exact same consolidation beginning, however the high that the dollar accomplished (omitting the COVID-19 crash highs) is a new high. I believe this signifies a stair-step function higher for the trade-weighted dollar as well.Trade-weighted dollar with 30-plus currencies (Source)Remember, a strong dollar is the Fed failing and it also provides huge tension to the rest of the worlds economy.The euro is almost the inverse of the DXY. One thing is for sure, the euro has actually broken its two-decade assistance trend line and its in big problem of crashing much lower.Chart of the euro versus the U.S. dollar showing a down breakout (source)The next 2 charts are of the Hong Kong dollar versus the U.S. dollar. The dollar capture quickly started this year.Monthly chart of the Hong Kong dollar versus the U.S. dollar (source)The second chart of the Hong Kong dollar is a close up of the day-to-day timeframe. Daily chart of the Hong Kong dollar versus the U.S. dollar (source)The Hong Kong authorities release their reserve data, so we can get an idea to the severity of their situation.

Watch This Episode On YouTube or RumbleListen To The Episode Here: In this episode of the “Fed Watch” podcast, we focus on crucial macro charts. We cover bitcoins chart, currencies like the dollar, the euro, the Hong Kong dollar, and gold along with energy products. We didnt have time to get to all the charts I prepared, due to the fact that the live show has time restrictions. I will attempt to get a second part out today to cover the rest of my product charts, in addition to supply chains and shipping costs. You can find the slide deck of charts here.Other topics covered in todays episode consist of President Joe Biden and Federal Reserve Chair Jerome Powells meeting yesterday, where I attempt to flesh out the significance of this Wall Street (Powell) versus globalists (Biden) face-off, and we enter a couple of things from Davos recently, particularly the Kissinger remarks about Ukraine.”Fed Watch” is the macro podcast for Bitcoiners. Each episode we talk about present occasions in macro from throughout the world with an emphasis on central banks and currency matters.CurrenciesThe first currency we speak about is bitcoin. I go over the current pop in cost on Memorial Day, and how it is simultaneous with a growing bullish divergence in the indicators.However, I likewise return in time to approximately one year back, when there was an extremely similar situation. In June 2021, there was a bullish divergence in these 2 signs and a breakout of a descending wedge. That relocation was a fake out, cut brief by the Grayscale (GBTC) unlock wave in July. The current situation is similar on the chart, but not similar in the basics. I just wished to point out a previous example where a breakout like this week failed.I make an effort to remove the “bitcoin increase equals dollar collapse” false narrative here. The dollar and bitcoin can rise together due to deflationary pressures pushing people to money and away from counterparty risk.Next up is the dollar. On the live stream, I reveal the following chart and talk about how we could be headed for a new higher variety on the dollar. Maybe we see another five to 7 years of the dollar index (DXY) in a range of 100-110, sort of like how it delved into the 90-100 range in 2015. Dollar index chart with technical analysis (source)For numerous who dont like DXY due to the fact that it is too narrow (euro 57.6%, yen 13.6% and pound 11.9%), I offer a chart of the trade-weighted dollar that includes 30-plus currencies including the Chinese yuan and Mexican peso.In the listed below chart, we see the very same combination beginning, however the high that the dollar achieved (leaving out the COVID-19 crash highs) is a brand-new high. I think this symbolizes a stair-step function higher for the trade-weighted dollar as well.Trade-weighted dollar with 30-plus currencies (Source)Remember, a strong dollar is the Fed stopping working and it likewise provides massive stress to the rest of the worlds economy.The euro is nearly the inverse of the DXY. It also reveals a current breakout, but in this case downward. If the dollar rally is to combine prior to heading greater, the euro is going to combine prior to heading lower. Something is for sure, the euro has actually broken its two-decade support trend line and its in huge trouble of crashing much lower.Chart of the euro versus the U.S. dollar showing a down breakout (source)The next two charts are of the Hong Kong dollar versus the U.S. dollar. There is a peg in location that is clearly obvious on the very first chart: It is a variety in between 7.75 and 7.85. Recently, the exchange rate has raced to the top of this pegged range, signaling enormous dollar pressure in the Asian economies like China, Hong Kong, Taiwan, Japan and South Korea. The dollar squeeze rapidly began this year.Monthly chart of the Hong Kong dollar versus the U.S. dollar (source)The second chart of the Hong Kong dollar is a close up of the day-to-day timeframe. The peg was protected effectively this time, by the authorities selling U.S. dollars and purchasing Hong Kong dollars, but the huge question is do they have sufficient reserves to continue defending this peg for the remainder of the year, like they performed in 2018? Daily chart of the Hong Kong dollar versus the U.S. dollar (source)The Hong Kong authorities release their reserve information, so we can get an idea to the intensity of their circumstance. At the end of April 2022, prior to the peg experiencing its greatest pressure, their reserves stood at $465.7 billion, $16 billion less than March.The last currency we look at is partially a currency and partially a commodity: gold. It has actually been hard being a gold bug for the last 11 years. Presently, the gold cost is listed below the 2011 high of $1,920, sitting at $1,840 at the time of recording. Imagine, holding gold for 11 years and losing cash despite the narrative of cash printing. Your option at that point would be either abandon your defective inflation dogma or go bananas on conspiracy theories. That summarize the gold neighborhood at this point, in my opinion.Gold area cost April 2021 through May 2022 (source)Energy CommoditiesMoving onto products, on this episode, I just have an opportunity to cover 2 charts. The first is Brent crude (U.K. crude rate in orange) and West Texas Intermediate (WTI) crude (U.S. crude cost in blue). They typically are very associated, with a small premium on European Brent.I desired to cover this chart today, due to the fact that of the headlines about the sixth round of EU sanctions on Russian oil; it is an absolute joke. As you can see on the chart, the orange line in fact drops on the day the theatrical sanctions were announced.Brent crude and WTI petroleum rates (source)My thesis for oil costs is as follows: Global demand is collapsing faster than oil supply. Recent elevated prices beginning in March 2022 are due to the conflict in Russia and Ukraine causing market unpredictability. Oil is very overbought. The cost of oil will start to fall quickly, lowering rates and customer cost index (CPI), and accompanying a growth downturn. This is not a stagflation scenario, it is a deflationary anxiety situation after a short-term spike in prices.Natural gas futures in Europe support my conclusion. They have been radically elevated, far above rational market fundamentals apart from sanctions on Russia. Russia has refused to be impacted by succeeding rounds of sanctions, and the chart is telling us that these price levels are mainly due to individualss concerns, not market basics. Once those worries disappear (when completion of the Ukraine scenario becomes more clear), costs will adjust down quickly.European natural gas futures (source)That does it for today. Thanks to the listeners and readers. Review and share!This is a visitor post by Ansel Lindner if you enjoy this material please subscribe. Viewpoints expressed are totally their own and do not necessarily show those of BTC Inc. or Bitcoin Magazine.

Other Questions People Ask

What insights can be gained from a Macroeconomic Overview Using Chart Analysis of the dollar index?

A Macroeconomic Overview Using Chart Analysis of the dollar index reveals significant trends in currency strength and economic health. The dollar index chart indicates a potential new high, suggesting a stair-step function higher for the trade-weighted dollar. This analysis highlights the implications of a strong dollar, which can signal challenges for global economies and the Federal Reserve's effectiveness.

How does the euro's performance relate to a Macroeconomic Overview Using Chart Analysis?

The euro's performance, as analyzed through chart analysis, shows a concerning down breakout that has broken a two-decade support trend line. This indicates potential further declines for the euro, contrasting with the dollar's upward trajectory. Understanding these dynamics is crucial in a Macroeconomic Overview Using Chart Analysis, as it reflects broader economic pressures and shifts in currency valuation.

What role does the Hong Kong dollar play in a Macroeconomic Overview Using Chart Analysis?

The Hong Kong dollar's performance is critical in a Macroeconomic Overview Using Chart Analysis, especially given its peg to the U.S. dollar. Recent charts indicate that the Hong Kong dollar is under significant pressure, raising concerns about the authorities' ability to maintain this peg amid dwindling reserves. Analyzing these charts helps to understand the broader implications for Asian economies and their responses to dollar fluctuations.

How can chart analysis inform predictions in a Macroeconomic Overview?

Chart analysis provides valuable insights for making predictions in a Macroeconomic Overview by identifying trends and potential reversals in currency values. For instance, the recent bullish divergence in bitcoin and its correlation with dollar movements can inform investment strategies. By examining these charts, analysts can better anticipate market reactions and economic shifts influenced by central bank policies.

What are the implications of a strong dollar in a Macroeconomic Overview Using Chart Analysis?

A strong dollar, as indicated in a Macroeconomic Overview Using Chart Analysis, often signifies challenges for global economies and reflects the Federal Reserve's struggles. It can lead to increased pressure on other currencies, such as the euro and Hong Kong dollar, which may face downward trends. Understanding these implications is essential for investors and policymakers to navigate economic landscapes effectively.