“Calm before the storm.” It’s a phrase that investor and finance analyst Jesse Colombo describes the moment the market is experiencing after weeks of volatility caused by the “customs war” launched by US President Donald Trump.
As reported by Cryptonoticias, the president announced mutual tariffs of several countries on April 2nd.
A few days later, Trump himself decided to postpone the application of the measure. 90 days to negotiate a new commercial agreement. However, this kind of ceasefire excluded China and 145% tariffs were applied.
Authorities in the Asian giants have raised taxes for imports from the US, not just crossed weapons.
When the conflict between the two major commercial forces seemed to intensify, authorities from both countries issued signs of dialogue, which provided a rest for the market.
In this regard, Colombo states: “After months of constant counter-covering news on tariff plans and other Trump administration policies, financial markets have settled in recent weeks.
However, this calmness can be temporary when you bring up the phrase that begins this article. Colombo himself claims that “another sudden movement is turning the corner.”
Colombo’s paper focuses on the DXY index, which measures the value of the US dollar in front of a basket of fíat currency. Such an index Recently, I’ve fallen below 100 points in three years.
“Historically, rebounds from the 100 level have led to strong mass sales of raw materials, such as gold and silver, due to the established inverse relationship between the dollar and the price of raw materials,” explains Colombo.
According to its analysis, DXY integrates the technical analysis figures formed after the technical analysis diagram (ASTA) formed after the powerful initial movement (ASTA) before the price continues in the same direction.
That is, after falling below 100, the DXY began to move laterally, resulting in the formation of a flag. Usually this type of figure This tended to be resolved in the same direction of previous movements, in this case the bassist..
Similarly, Colombo warns: “As the index continues to drop, the next major support level to consider is 90. This is a move that marks a 10% drop in terms of current levels. It is a very realistic objective, especially as we approach the recession and bear market.”
As explained in Cryptopedia, Cryptopedia, Crypto Education Section, Technical Analysis, the term support is used to identify a type of soil or level in which the price of an asset tends to bounce back.
According to financial news analysts Cobessy’s LetterDXY’s fall comes as foreign investors eliminated $220 million in US stocks in April.
That’s an important figure, but it represents a decline compared to March. It’s at least the largest in a year when record $410 million was recorded.
“As money leaves the US, the euro will be strengthened against the dollar,” said an expert in the financial newsletter.
Another face of currency is that DXY falls are usually interpreted as a bearish signal for the dollar, but are bullish for assets such as gold and other raw materials. In this regard, Colombo explains:
“Last week, gold was technically overcaped in the short term, which justifies certain attention. However, it is important to remember that the most explosive bullish movements usually occur when assets are already overcovered and have strong impulses.
Jesse Colombo, Financial Markets Analyst.
The specialists argue that the publication of macroeconomic data from the US or the release of novelties in the “Tax War” could serve as a catalyst for gold prices.
In an age of economic uncertainty and weakness in the US dollar, gold is the most chosen reserve asset by investors.
Is it gold maintained for thousands of years? Reserving its role and value as a means of exchangestrengthens its importance throughout history.
¿ Y Bitcoin?
Colombo doesn’t mention Bitcoin (BTC) in his paper, but it should also be included in the list of assets that may benefit from the weaknesses of the US dollar.
This is because many investors define the currency created by Nakamoto At The similarity with precious metals is “digital gold.”
What happens at BTC is that 21 million units supply is limited, and its broadcasts are cut every four years at an event known as half.
Similarly, it should be noted that unlike Fíat Money, Bitcoin has not been devalued by central bank financial issuances or decisions. Furthermore, it is a decentralized currency and is resistant to censorship and confiscation.
Even BlackRock, the world’s largest financial asset manager, focuses on these characteristics, and one of its reports recognizes the possibility as “unique diversification active.”
For the companies leading Larry Fink, digital currency can serve as “a coverage of risks that traditional assets cannot handle, especially in times of increasing geopolitical and economic uncertainty.”
It is still in the early stages of adoption, The fact that it is compared to gold over its 16 years of history It reflects the exponential growth of its association in financial markets.
This comparison highlights not only its potential as value preparation, but its ability to attract the attention of institutional investors in search of alternatives to the traditional financial system.
