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The U.S. aircraft carrier is under pressure, the U.S. dollar has collapsed, yields have plummeted, and a "deception" is taking place.
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Hello everyone, today XM Forex will bring you "[XM Forex Platform]: The US aircraft carrier is under pressure, the U.S. dollar has collapsed, yields have plummeted, and a "cheating line" is taking place." Hope this helps you! The original content is as follows:
On Wednesday (April 1), the global financial market showed violent fluctuations due to the interweaving of multiple xmmarkets.cnplex factors. Affected by the fluctuations in geopolitical news, the release of key macro data, and the intensive statements of Federal Reserve officials, risk aversion has experienced a clear "hot and cold switch" between the Asian session and the European and American sessions.
The core logic of the current market revolves around the spillover effects of the "Russian-Ukrainian situation" and the stability of the Middle East energy supply chain. Earlier, stimulated by rumors that relevant parties may reach a phased xmmarkets.cnpromise, market risk appetite surged, causing the Nikkei index to surge 5.2% in a single day, safe-haven funds began to withdraw from safe-haven assets, and the U.S. dollar index and U.S. bond yields both came under pressure. However, as well-known institutions revealed that US naval formations were gathering in conflict areas, and tough remarks about control of the Strait of Hormuz leaked out, the market began to wonder whether the previous optimistic expectations were an "April Fool's Day" misreading.
In terms of economic fundamentals, the intensive release of ADP employment numbers and manufacturing PMI data in March is re-revising the market's judgment on the inflation trend in the second half of the year. As logistics bottlenecks cause global factory input costs to soar, inflationary pressures are returning through the supply chain, making the trend of the U.S. dollar and U.S. debt increasingly confusing.
Fundamentals and technical aspects are deeply intertwined: the safe-haven attribute of the US dollar index has weakened
After hitting a high of 100.6400 recently, the US dollar index has shown a significant "double top" decline. From a fundamental perspective, the U.S. dollar’s safe-haven status is facing unprecedented challenges. Despite geopolitical tensions, the market expressed concerns about U.S. fiscal independence and policy volatility caused by tariff remarks.worries, causing safe-haven capital flows to become dispersed.
On the technical side, the 240-minute cycle shows that the U.S. dollar index has fallen below the Bollinger Band mid-track 100.1031. In the MACD indicator, the DIFF line and the DEA line form a high cross, and the green kinetic energy column continues to expand, indicating that short-term short-term forces still dominate.
Support and resistance prediction:
In the short term, the key support range below the US dollar index is located at 99.00-99.20. This is not only the bottom of the previous shock range, but also the psychological threshold. If the geopolitical situation further eases the signal, the dollar may test the support of this range. On the contrary, if the conflict escalates and drives oil prices back above $110, the upper resistance will first focus on the middle track of the Bollinger Bands at 100.10, and the strong resistance will be around the previous high of 100.64.
The yield curve and auction pressure: the long-short tug-of-war in the U.S. bond market
The U.S. bond market is currently in the center of a tug-of-war between "inflation expectations" and "safe-haven buying." The 10-year U.S. Treasury yield has fallen rapidly from a high of 4.479%, reflecting the market's illusions about an "early ceasefire" in the short term, which has driven some buying to cover positions. However, this optimism is facing a reality test: on the one hand, the upcoming $69 billion 17-week Treasury bond auction may face weak demand; on the other hand, the stickiness of inflation caused by soaring manufacturing costs.
From the perspective of technical indicators, the 10-year U.S. bond yield is in the process of a stepped decline, and the MACD green kinetic energy column is gradually lengthening, indicating that the adjustment pressure has not disappeared. The current quotation of 4.284% is only one step away from the lower Bollinger Band track of 4.235%.
Support and Resistance Forecast:
In the next 2-3 days, the first support level for the downward yield rate is expected to be 4.235%. If it falls below, it will further test the intensive trading area of 4.15%-4.20%. The upper resistance level is mainly concentrated at 4.350% (the middle track of the Bollinger Bands). Against the background of current high energy prices, if the yield returns above this level, it will strengthen the market's expectations for long-term high interest rates.
Cross-market linkage analysis: the link between energy costs and supply chains
The U.S. dollar and U.S. Treasuries have shown extremely high consistency in the past 48 hours. This simultaneous decline reveals the core of current asset pricing: the redistribution of risk premiums.
First of all, the feedback from the Japanese market is of bellwether significance. As Asian economies such as the Philippines and Japan rely heavily on oil from the Strait of Hormuz, soaring energy costs are squeezing manufacturing profits. When the market sent de-escalation signals, risk aversion subsided, causing U.S. bond yields to weaken in tandem with the U.S. dollar.
Secondly, the alienation of inflation logic deserves vigilance. Traditionally, cost-push inflation would have pushed up yields and supported exchange rates, but current war disruptions have left supply chains extremely fragile. If energy prices remain above $100/barrel for a long time, it may trigger concerns about "stagflation" in the U.S. economy, and the U.S. dollar and U.S. debt may thenDivergence now - U.S. Treasury yields are higher due to inflation risk premiums, while the dollar may be pressured by weak economic fundamentals.
The above content is all about "[XM Foreign Exchange Platform]: The U.S. military aircraft carrier is under pressure, the U.S. dollar is collapsing, yields are plummeting, and a "cheating line" is taking place". It is carefully xmmarkets.cnpiled and edited by the editor of XM Foreign Exchange. I hope it will be helpful to your trading! Thanks for the support!
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