DXY Fundamental & Fibonacci Analysis

The Covid-19 pandemic and Russia vs Ukraine war created supply shortages and imbalance in the global economy. In order to balance out the supply & demand and find equilibrium, demand needs to be reduced to meet supply. The way they can achieve this is by hiking interest rates, making things more expensive and making risk assets costly to hold. Until inflation has cooled down, the Federal Reserve will continue to hike interest rates, which means selling of risk assets by smart money in exchange for USD, so they can profit from Dollar strength and high interest rates even when markets are going down, like a safe haven. It is estimated that at least 2 more rate hikes are priced in. If the Fed doesn't hike interest rates before recession it would be disastrous for the economy, it's unfortunate for most of the population but it's tough medicine.

I expect continuation of the uptrend until the fundamental situation changes, which should happen sometime in 2023, possibly at the end of Q1, a year before the Bitcoin halving also. I expect DXY to break the Lower High at 121 and top out at 132, at the Golden Ratio of the previous swing impulse and the -0.272 Fibonacci extension.

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