US Fed & DXY

The US dollar (USD) showed moderate weakness today, in line with the broad equity rebound following the partial easing of tensions in the Middle East (Iran and the Strait of Hormuz).

Context: Where the Fed stands now

The Fed is holding rates in the 3.50%–3.75% range, in line with expectations. The decision was not unanimous — two dissenting votes in favor of a 25bp cut (Miran and Waller) — and Powell appears comfortable at current levels, adopting a "wait and see" stance.

Market expectations point to two rate cuts in 2026 (March and June), and possibly an additional one in the second half of the year, although the timing could be pushed back depending on confirmation of lower inflation expectations by mid-year.

What could happen tomorrow and its impact on the DXY

The FOMC meeting is the most important macro event of the week. Three scenarios are possible:

Scenario A — Confirmed pause + hawkish tone (high probability)

The Fed holds rates, and Powell reiterates that "data will drive decisions." No clear signals of an imminent cut.

DXY: Bounce from 99–100. Recovery toward 101–102.

Scenario B — Pause + dovish tone (partially priced in by markets)

Rates held, but an explicit door opened to a June cut. Markets are already pricing EUR/USD around 1.17, a level reached following last December’s cut with a more accommodative tone from Powell.

DXY: Stays below 100. Structural weakness continues.

Scenario C — Surprise 25bp cut (low probability)

Unexpected cut amid signs of economic cooling.

DXY: Break below 99 toward 97. Sharp move.

Chart macro context: The dollar experienced a major bull cycle in 2021–2022, pushing the DXY to 114–115, driven by aggressive Fed rate hikes. Since then, it has been in a distribution/correction phase for over three years.

The base case is a pause with a slightly dovish tone — keeping the dollar structurally weak and supporting the trade in European banks, commodities, and emerging markets. The primary risk is a more hawkish-than-expected Powell triggering a DXY bounce from 100 and putting pressure on global risk assets.

XES — SPDR S&P Oil & Gas Equipment & Services ETF

What is XES?

A pure sector ETF that tracks the S&P Oil & Gas Equipment & Services Select Industry Index. It includes the major oil services companies — Halliburton, Schlumberger, Baker Hughes, Weatherford — and represents the "pick-and-shovel" play on oil: drilling, fracking, well maintenance, and specialized equipment.

Unlike upstream players (Repsol, Exxon), XES does not produce oil — it provides the services that make production possible. This gives it higher beta to crude prices and drilling activity: when Brent holds above $90–100, services companies sign more contracts and raise capex → XES moves up sharply.

Technical read (2009–2026)

The story in one sentence: XES has been in one of the most brutal sector bear markets in modern history for 10 years — down 90% from its 2015 highs — but has just reached a critical resistance zone that could define the direction of the next several years.

Major resistance: $120–130

The blue dashed line marks the most important horizontal resistance on the chart, tested repeatedly since 2017 without a convincing breakout. Price is now approaching it for the first time with real momentum since 2022–2023.

Structural support: $50–60

The floor of the 2020 COVID cycle. It has held through every subsequent pullback and represents the base of the current operating range.

Long-term VWAP (blue line): Coincides with the resistance zone and remains in a downtrend above price — confirming that the long-term structural trend is still bearish. Price has not yet reclaimed the VWAP, which is a necessary condition before any talk of a trend reversal.

Why it matters now

In the current environment of a geopolitical risk premium in Brent driven by tensions in the Strait of Hormuz and Iran, XES is one of the ETFs with the highest beta to a crude spike. Brent structurally above $90–100 translates directly into higher drilling activity and more contracts for the index’s underlying companies.

Add to that a weak dollar (DXY below 100), which has historically been an additional catalyst for commodities and energy cycle assets.

SITM — SiTime Corporation

What is SITM and why is it exploding now?

SiTime is the global leader in MEMS oscillators and timing devices (quartz-free). Its chips replace traditional oscillators across virtually every application:

- AI and data centers (Nvidia, AMD, hyperscalers)

- 5G/6G, Edge Computing, automotive (EV), and defense

It is a pure pick-and-shovel play on the AI and semiconductor boom. It does not manufacture logic chips, but without its precision timing, AI GPUs cannot operate at full speed. This is why it carries very high beta to the semiconductor sector and to any AI capex news.

Today it rose +4.77% on strong volume (intraday high of $355). This fits perfectly with the "Technology & Semiconductors" sector we identified as the hottest yesterday.

The biggest catalyst: Renesas Timing acquisition (February 2026)

This is the key event behind the price spike to $440 on the chart and the subsequent pullback:

On February 4, 2026, SiTime announced the acquisition of Renesas Electronics’ timing business assets, accelerating its path toward $1 billion in revenue as the premier pure-play Precision Timing company in the market.

The deal numbers are highly significant: SiTime will pay $1.5 billion in cash plus approximately 4.13 million shares. The acquired business serves more than 10,000 customers, with nearly 75% of revenues in the AI-Datacenter-Communications segment and is expected to generate $300 million in revenue in the 12 months following close, at a 70% gross margin.

Key levels

Support / decision zone: $300–320 (blue box) — The most important level on the chart. It acted as resistance in 2021–2022 and now serves as support following the breakout. Price bounced from this zone today (+4.77%). The green arrow on the chart marks precisely this entry point.

Immediate resistance: $380–400 — First recovery target if support holds.

SITM is the pick-and-shovel play on AI applied to precision timing — a critical niche, invisible to the public, but indispensable for data centers, autonomous driving, and robotics. The spike to $440 following the Renesas Timing acquisition was the market’s stamp of approval. The current pullback to the historical support zone of $300–320 offers a technically compelling entry point. Key level to watch tomorrow: as long as $300–320 holds, the bullish thesis remains intact.

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