No love for the USD


The USD fell across the board yesterday and is currently on lows for the day at the start of the European trading session (7:18 GMT). The USD fell immediately after GDP data printed much lower than expected, it was able to rebound a bit after the FOMC announcement but has since faded. Gold and Oil were slammed lower after the weaker than expected data and seemed to not be affected by the FOMC decision. USD indices ended higher and are pressing right against all time highs.

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We have a fair amount of US data coming up later today, mainly US ISM. Tomorrow will be much more important with change in NFPs.

Entire calendar here from dailyfx.com

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GBP/AUD still looks like it could continue lower. The doji candle shows some market indecision.

We continue to hold short.

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AUD/USD looks like it may be finding trend line support. However with the weak data we have seen out of Australia and the dovish RBA who would like to see the currency depreciate it is best to stay on the sidelines for now.

For now we are flat.

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GBP/USD is currently trading near highs for the day, we are looking at a possible trend continuation on the back of some GDP data. If NFPs on Friday come in weak we could definitely test 1.70 by the end of the week.

For now we flat.

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More on GBP/USD here

NZD/USD is currently trading near highs for the day (7:34 GMT), NZD/USD has been able to rebound lately but may slow as it is still capped by a downward RSI trend. Major support is market by the long term 0.236 fib at around 0.85 with strong resistance coming in around the 2013 high and YTD highs. Look for a bullish RSI break for possible NZD/USD continuation higher.

For now we are holding a small long.

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More on NZD/USD here

USD/JPY  has not moved a lot for the last 3 months but that may change soon, RSI is in a slow but steady upward trend and the triangle pattern is pointing towards continuation. This pair is really locked in consolidation for the time being because even though the Bank Of Japan is not considering adding any additional QE anytime soon the US is tapering which is adding some strength to the USD. Plus while the markets are in a risk on theme the JPY should stay weak.

We are holding long.

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More on USD/JPY here

USD is facing some resistance near term, reaction low resistance and down trend resistance may prevent further USD strength for the time being. USD could possibly break out of this trend heading into May if the market likes NFPs this Friday and volatility picks up, which is currently near all time lows. Expectations are very high for the USD and this is leaving us with a cautious outlook for the time being.

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Gold has dropped back below $1300 and could face a new wave of selling. Gold is currently trading around $1283 (7:43 GMT).

SPX500 has failed to fall much further as market sentiment is currently very bullish, we could possible see new all time highs this week. If we are unable to press above all time highs there is a risk of steeper declines.

I have added an overlay of Gold to the SPX500 to prove a point that the two are not always inversely correlated. Last month Gold has been pretty correlated vs the SPX500, maybe on possible bubble or market top fears but has dropped off recently…

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