ATFX Summary: In previous articles, we have always emphasized: When the Federal Reserve announces a reduction in bond purchases, it is very likely that the dollar index will end its rise. This seems to violate logic. After all, debt shrinkage means currency tightening, and currency tightening can boost the US dollar index. In fact, the capital market has been trading expectations, and before the expectations are realized, it can play a positive role in the price; once the expectations are realized, such as the debt reduction plan is implemented, it will trigger a chain reaction of "the favorable rate is negative". Therefore, the US dollar index fell sharply after hearing the news, but the US stock market rose sharply after hearing the news. Everyone should not panic. This is determined by the unique operating rules of the capital market.
is light on the debate between "doves" and "hawkish"
Now people judge the speech of Federal Reserve Chairman Powell, who likes to use "doves" or "hawkish" to determine it. In fact, Powell's speech is very complicated every time, and it is difficult to judge by "dove" or "hawk" most of the time. The reason why the media can say that dove or hawks is mainly because it depends on the conclusions drawn after the rise and fall of the US dollar index. If the US dollar index falls, it is dove, even if it is not a dove, it is dove; if the US dollar index rises, it is hawkish, even if it is not a hawkish, it is still hawkish. This kind of "depend on the market" situation not only occurs in the Federal Reserve's interest rate decisions, but also often occurs in non-agricultural employment reports, CPI data, and even in the US presidential election.
We recommend that participants be light on the argument between "doves" and "hawkish", and do not use the price rise and fall to counter-suggestions of doves or hawks, but should have their own judgment on data, events, and speeches, trade independently, and not be led by the media.
USD Index Daily Line
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Interest Rate Resolution On the day, the USD Index fell 0.27%, reaching a low of 93.82. Looking at the 5-minute cycle, after the interest rate resolution was announced, the USD Index first fell negatively, then rebounded rapidly, and broke through the high point of the decline band. During the press conference, the US dollar index rose first and then fell, and the decline was much greater than the increase of .
10-year US bond yield daily
ATFX provided by
Although the US dollar index performed poorly, the 10-year treasury yield rose sharply. The day before, the yield on the US Treasury was only 1.5470%, and after the interest rate decision, the yield rose to 1.602%, up 5.5 basis points. However, from the perspective of "the positives are all negative", the upward trend of the 10-year US Treasury yield is difficult to continue in the long run.
Summary: The ATFX analyst team believes that the current daily line of the US dollar index has a significant top structure. If the low of 93.28 on October 28 is effectively broken, the medium- and long-term downward trend will likely open.
ATFX risk warning and disclaimer: The market is risky, and investment should be cautious. The above content only represents the view of the analyst and does not constitute any operational suggestions.
This article is from the Financial Network
