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In yesterday’s US Session, Fed Chair Powell indicated that interest rate hike tempo could slacken (i.e. not be overtightened) but the outlook for rate cuts was not on the table yet.
This predictably saw equities push higher as shorts were covered frantically and the Dollar Index falter. The DXY chart below puts this into context. An 18-month cycle trough may have formed mid-November, which suggests a meaningful upside rotation could be upon us (equities down, crypto down) and I see this as potential support.
Further potential support is the green up sloping line which is the trend line associated with the 20-week cycle. Price looks to be in a 20-day cycle trough zone and the preferred view is stabilisation this week and a push towards the peak of the blue 40-day cycle perhaps 4 points higher in the last week of the month.
