[music]
>> Hey folks, Nick Valdez here and welcome
to Verified Investing where today we're
talking about currencies and potential
trade war with Canada. And what is that
going to mean for the US dollar and the
Canadian dollar? And we have the Chinese
Yuan hitting some key key resistance
against the US dollar and that folks
will give the US dollar some strength
which might push down Bitcoin. It might
push down gold. Might push down some
other precious metals as well and
potentially even oil. Well, let's go
ahead and kick things off with the DXY
chart. This is the US dollar measured
against a basket of currencies. Now,
when you look at this DXY chart, I
actually kept this up from our previous
video cuz we were looking at two
potential directions for this slightly
you know, it's a little bit of a trend
line here. A little bit trend line
ascending trend line here. Not quite a
wedge pattern, but we were knocking on
the door to the downside more than we
were knocking on the door to the upside.
Let me go ahead and remove this for you
folks. Now, the way I like to think of
it, if you're running down the hall and
you bang on the doors on the right side
of the hallway four times and you bang
on the doors on the left side of the
hallway two times, who is more likely
going to open the door? Well, if you're
banging four times on the right side,
more than likely someone on the right
side of the hallway will open the door
and that's what happened. It opened the
door to some downside pressure for the
DXY.
Now, I'm going to zoom in in a little
bit to the four-hour chart cuz you can
see right here, we have a bear flag.
Now, let's go into the four-hour so you
can see the flag pattern drops to the
downside. Well, on the four-hour chart,
we have another potential bear flag, but
we have a key level of support that we
must hold and if we don't hold this,
then we can start talking about some
other moves to the downside and you can
just see here, you know, a couple key
levels, couple key touches there where
Bitcoin or sorry, where the dollar was
able to hold its level and folks if it
drops well you're going to see you know
a weakened dollar which means higher
prices for things like Bitcoin things
like gold but I'll go into some other
ones and folks I have to show you this
Canadian dollar chart. We have a trade
war that is kicking off today with
Canada and the US as Trump and their
Canadian Prime Minister they're battling
right now over the US tariffs and we
have some retaliatory tariffs but if you
want to learn more about that go to
verify investing.com put out a little a
small article on that on the alpha
action post tab. Now let's look at the
the British pound the British pound here
is coming up to some key resistance. Now
look at this trend line here this is all
the way 2018
and you move down you can see here this
is going to be a key level around 1.38
for the Great Britain the British pound
here measured against the US dollar. Now
let's look at the Japanese yen.
We intervene help prop up their currency
but now it's just kind of you know
moving around and folks got to be honest
this looks a little bit like a bull flag
pattern so if this does move to the
upside we can measure this. The way you
measure a flag breakout is one you would
grab your flagpole put it at the
breakout level let's just assume you
know we're we're kind of doing the
candle bodies not so much the wicks or
really if you do both you can kind of
get the same area here. It's going to
put us in right around 0.066
two zeros two sixes two fours everybody
no 67 I know for all those meme meme
people out there not mean but the memes.
Now let's look at the euro euro pressed
you know against the US dollar had a
nice little level of support another
little level of support came down for a
second touch.
You can see this is a key level going
all the way back to February 2023 so I'm
keeping an eye out on this as a level of
support but looks like we did
potentially break this short-term trend
line to the downside. So, we're going to
get our trend line tool,
put it right here, and you can see kind
of came up for a retest. So, if we zoom
in a little bit, you can see kind of
chopped around in this area, and then it
started to move to the upside. That's
what we're seeing with the euro. But
now, let's look at two of the very
important currencies. One of them's
going to be the Chinese yuan. Now, this
one has been gaining against the dollar
in a major way for a significant amount
of time here. Let's go ahead and jump to
the chart. We're going to get our
measuring tool. Now, we're more worried
about the x-axis, aka the time.
511 days, and it has risen, you know,
only about 10%, but when you're looking
at currencies, 10% can have a major
impact on the markets. But we are also
coming up to some key resistance. Look
at this pivot level here in January '23.
Look at this pivot high in March of
2019, and you know, it kind of chopped
around this way on our way down. So,
this to me is telling me that, "Hey,
this is going to be a key level for the
Chinese yuan measured against the US
dollar." Now, if we break above, I am
looking at this descending trend line as
the last stop. Now, if the Chinese yuan
keeps gaining against this, this is not
good news for the US dollar, but it will
be good news for the asset holders.
Because like I said, if we lose value of
the US dollar, it needs more dollars to
buy hard assets. Hard assets like
silver, like gold, or even a barrel of
oil on the world market, or even
Bitcoin, folks. But this, you know, may
be potentially coming up to some steep
resistance.
Last time we hit it was here, and this
wasn't too much time, folks. These are
weekly candles that we're looking at, by
the way.
238
days, about 34 bars, then it would find
a little bit of a bottom. As you can
see, there's a nice little area of
support to the downside, and that's
going to be, if we were to measure this
percentage-wise,
uh you know, saying, you know, assuming
it kind of hits up this area because I I
do see a little bit of a trend line
here, kind of moving to the upside. So,
maybe a little bit uh less of a move to
the downside, about 8.4, 8.5% to the
downside there. All right. Now, let's
look at the Canadian dollar. Like we
said, there's tariffs being enacted,
little bit of retaliatory tariffs
happening right now. And even a minister
over there, they have financial
ministers, uh you know, kind of like
their officials in a way.
Their officials did not mince words. Es-
essentially said, "We're pressuring now
because of the elections. They know
because of our US elections, we have
midterms elections coming up in
November, they have extra leverage cuz
no politician wants to head into an
election season with their currency
losing value." So, Canada, they're
exerting maximum pressure right now, or
at least relatively speaking here. Now,
we do have this descending trend line to
the downside. This one is just a
fascinating chart to me here. If you go
to the wick high, 2011,
July of 2011. Again, these are weekly
candles. You can see we came down and we
kissed the top right here, September of
2012. That established our descending
trend line. Now, if you zoom in to
today's price action, in fact, we'll
even go to the daily,
look at that. We rejected. We rejected.
We rejected. We rejected. And now, it
looks like we may be potentially
continuing trying to knock on this door,
which would give us an upside target.
What is our upside target?
Well, to me, you can see your downside
target, pretty clear level right here,
you know, pivot low, pivot low, pivot
low, going all the way back to 2016. I
think I believe that is it, yeah. But,
let's move this up to this peak. Let me
show you this, folks. Now, again, this
is the US dollar
uh you you a Canadian dollar chart. So,
Canada dollars measured in US dollars.
And let me move this. Wait for it. Wait
for it.
Let me hit the weekly.
Cuz we got to go back a ways. Right
there, folks. So, very, very close to
this pivot low. 2008, 2009. This was the
financial crisis. Where you can see, you
know, at least for a brief period,
relatively speaking, Canada was faring
better. Uh then you can see uh Canadian
dollar gaining, gaining against it right
here. So, losing value. I think Canada
was robust. Canada was weak. Canada was
strong. So, keep an eye on this. All
eyes are going to be on basically Donald
Trump's reaction. Is he going to have a
strong reaction against the retaliatory
tariffs? You see, you know, maybe
conversing with Scott Bessent,
talking to his team, trying to figure
out, you know, maybe the best way to not
harm the economy as we get close to the
election, folks. But, that's our
commodities chart video for today. Go
ahead and smash that like button. I know
it's it's a little bit uh in the weeds
here cuz we're talking about currencies,
but trust me, when we're talking about
the measuring stick, it's very, very
important cuz the dollar is the
measuring stick for the assets that you
were buying and the equities that you
were trading. But, that's all we have
for today. I appreciate you sticking
around to the end, as always. Folks,
I'll see you at Crypto Revealed and on
Friday's Crypto Combat, 1:30 p.m.
Eastern Standard Time. Thanks for
sticking around. See you in the future.
Appreciate it.