Weekly Report: Finally the big drop has come.
The price is finally breaking the lower part of the channel, sit and play this beautiful downtrend.
What to take on considerations:
In the fundamental side:
*The trade war escalation of US against the world, now with Mexico and the progressive rises on tarrifs didn´t give a good taste to the market, the bond market is getting cheaper, with the spread of the 3 months bonds yield with the 10 years bonds rield rising more and more, the 10 years bond yiels is touching the 2.01 level, but it can get lower because the market is expecting two more cuts rates for the year end according the Fedwatch tool of CME Group, so in this point I can just say, the DXY is going to have a sharply drop to downside.
Tomorrow 4/6/2019 Powel is going to speak, the market is expecting a more dovish tone to cut rates this year.
In the technical side: The price is breaking finally the lower part of the channel, in this order of idea the ABC expanded flat retracement process is starting his journey to the "C" direction. I have to areas, the first one is the beggining of the ABC retracement process and the IV wave of the big picture movement for possibles smalls rebounds.
Source:
treasury.gov/resource-center/data-chart-center/interest-rates/pages/TextView.aspx?data=yield
cmegroup.com/trading/interest-rates/countdown-to-fomc.html
cnbc.com/2019/06/03/heres-why-bond-yields-are-falling-and-why-the-rout-wont-end-anytime-soon.html
What to take on considerations:
In the fundamental side:
*The trade war escalation of US against the world, now with Mexico and the progressive rises on tarrifs didn´t give a good taste to the market, the bond market is getting cheaper, with the spread of the 3 months bonds yield with the 10 years bonds rield rising more and more, the 10 years bond yiels is touching the 2.01 level, but it can get lower because the market is expecting two more cuts rates for the year end according the Fedwatch tool of CME Group, so in this point I can just say, the DXY is going to have a sharply drop to downside.
Tomorrow 4/6/2019 Powel is going to speak, the market is expecting a more dovish tone to cut rates this year.
In the technical side: The price is breaking finally the lower part of the channel, in this order of idea the ABC expanded flat retracement process is starting his journey to the "C" direction. I have to areas, the first one is the beggining of the ABC retracement process and the IV wave of the big picture movement for possibles smalls rebounds.
Source:
treasury.gov/resource-center/data-chart-center/interest-rates/pages/TextView.aspx?data=yield
cmegroup.com/trading/interest-rates/countdown-to-fomc.html
cnbc.com/2019/06/03/heres-why-bond-yields-are-falling-and-why-the-rout-wont-end-anytime-soon.html
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