Warsh's First Remarks Boost Rate Hike Bets

DXY shows potential for a short-term pullback as the RSI14 enters overbought territory at 78.39 and has risen over 1% in the last 24 hours. Although the news headline reinforces rate hike expectations, this may already be priced in, and technical indicators point to overheating. The MACD is positive but hovering near the signal line, suggesting momentum could weaken. While trading above the SMA20 and SMA50 supports the broader trend, profit-taking may occur in the near term. Therefore, I expect a limited correction rather than a continuation of the rally.

The news strengthens expectations of a rate hike, supporting the USD. Technical indicators also confirm the bullish trend: RSI at 66 is in the buying zone, MACD is above the signal line, and the price is above both the 20-day and 50-day moving averages. The upward movement is likely to continue in the short term, but the RSI approaching overbought territory warrants caution. Therefore, the bullish outlook is supported with medium-to-high confidence.

The news headline, reinforcing rate hike expectations, could suppress risk appetite. Although the RSI at 35.86 is near oversold territory, the price remaining below the SMA20 (7524.67) and the MACD staying below its signal line indicate short-term weakness. The 0.04% decline in the last 24 hours confirms negative momentum. Rising rate hike bets may particularly pressure growth stocks, increasing the likelihood of the index testing the 7400 support level. However, the low RSI level could also set the stage for short-term bargain buying.

The news headline strengthens expectations of an interest rate hike, creating a negative environment for non-yielding assets such as gold. Technically, GLD is trading below its 20-day SMA (397.03), with the RSI at 38.2 in weak territory. The MACD remains below the signal line, indicating sustained short-term bearish momentum. The last close at 388.69 is just below the 50-day SMA (389.72); a break below this level could trigger further selling pressure. However, the RSI approaching oversold territory may signal a potential corrective bounce, suggesting that while the bearish outlook is strong, downside may be limited.