2023-04-19 11:26:00
Dollar and gold analysis
After announcing the US data last week, it carried its loss with it to the fifth week, and the index retested the level of 100.80 witnessed at the beginning of February. This level first seen in February was the lowest since April 2022, then the index rose above 105.70 with the FOMC meeting (FOMC) which led to a change in pricing following the banking crisis that occurred in March.
Today I would like to share with you the latest position of the dollar index, the euro / dollar, the dollar / Turkish lira, and the ounce. .
The yellow metal’s breaking point
Since the ounce of gold has been hit quickly, although the price is still above $2,000, I see the main reference area above $1,876 and above $1,980. In other words, new levels are more than possible unless the correction reaches below 1,876.
On the USD/TL side, forecasts have not been available for analysis for a long time, and to be honest, I don’t find it right to pinpoint a technical level. Because when there is a situation that is unhealthy and even artificial, on what basis can we measure the price? I would just like to say that the widening gap between banks and exchange offices prompts the investor to withdraw foreign currency from the bank and conduct transactions in exchange offices. However, in the past, transactions from banks in case of high spreads were done at exchange offices. The reason for this is the pressure on the markets and the resulting loss of confidence. For a few days, the selling price of the dollar has exceeded the level of 20.00. The purchase also takes place in banks. In other words, although there are 19.30 levels on the platforms, the situation is very different in reality.
on the platform Investing.com, the price witnessed the highest level at 19.57. While many foreign institutions expect an increase in the exchange rate following the elections, the estimates start from 21 and rise to 30. It is reported that if the correct monetary policy is returned, the rate may stabilize following a while.
The fact is that the situation is completely unsuitable for analysis.
Analysis of the dollar and the euro
The first graph represents the dollar index. When we analyze the long-term trend from 2008, we find that the indicator is still moving within a channel. However, when we look at the movement that continued through buying during the 2020-2021 dip, the index gave the first signal by dropping below 103.50 in the first month of 2023 and reaching 100.80 in February. The second bottom was tested last week and the price continued to trade below 103.50. For the near term trend, a dip below this level is negative as the bearish zone expands. In other words, the sales area expands between 103.50-100.80. Since there is no strong support point below 100.80 that might support the index until 97.50, a break here might put the 100.0 threshold on the radar and revive the possibility of reaching 97.50..
So what might drive pricing in this direction?
Of course if there is no further development, an important factor is for the Fed to start cutting interest rates earlier than it forecasts, in line with market expectations. On the other hand, data that paints a picture of a slowdown in the US economy may also support this decline.
In the short term, I expect the index to maintain the range 100.80 – 103.50. The May meeting will be an important meeting in terms of guiding expectations.
On the EUR/USD side, the decline that started from 1.22 gradually accelerated to around 1.14 in 2022 and eventually fell to 0.96. The first positive formation was formed by surpassing 1.0370, with the purchases that took place following reaching the bottom. Then demand rose above 1.06 and movement below this level was limited during pullbacks. And following testing the 1.1060 resistance twice, we can see stability in the range of 1.08 – 1.10 for a while. However, keeping in mind that the ECB will continue to hike rates for a bit longer than the Fed, the band I have set may be set above 1.10 in the future..
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