Jump to content

USD starts 2023 on the back foot


Recommended Posts

Analysts had suggested that the US dollar would continue its recent weakness with more downside and short traders have not been disappointed. That being said, the dollar is holding up against the euro.

Jeremy Naylor | Writer, London | Publication date: Tuesday 03 January 2023 

 

(Video Transcript)

Currency markets subdued
Trading on the currency markets has been fairly subdued on this first main day of trade for 2023, as traders are gearing up for some important data to be released later on in this week.

Let's start tomorrow with the Federal Open Market Committee (FOMC) minutes. At the conclusion of the last Federal Reserve (Fed) meeting mid-December, Fed chairman Jerome Powell announced that 50-basis point increase of Fed funds rate of a range between four-and-a-quarter and four-and-a-half percent, now at the highest in 15 years. This was a conclusion of a year that saw the US Federal Reserve hiking by a cumulative 425 basis points.

Now investors are also expecting some employment data out this week. On Thursday, the ADP employment change, that's the private payrolls release and weekly jobless claims, and December non-farm payrolls coming on Friday.

A quick snapshot of what we're expecting there: early expectations point to 200,000 job creations last month. The unemployment rate is set to remain at 3.7% and average hourly earnings expected to rise by a margin of 5% year-on-year.

US dollar basket
I want to show you this chart. This is the dollar basket, the dollar trading against the whole basket of G10 currencies. And you can see we continue to challenge this line of support at 10307.

We saw the return of trade today, again testing that area at 10307, and if we do get a break of that within down to levels not seen since the 9th of June, and then the next line of support to watch out for is 10110.

EUR/USD
How do you trade this? Well, it's around the euro/dollar trade. It's the second day in a row of losses for the euro against the US dollar, despite the weakening of the US dollar down to those levels. The line of support is at 10616, which I've drawn on here, which were the highs we had back to the 27th of June. And we saw that area challenged again recently, it has been an area of interest at 10616. 10657 is what we are trading at the moment. And with the Fed minutes released tomorrow, we'll be looking for, I guess, a continuation of the recent trend that we've had with a stronger euro against that weaker US dollar.

If you're strong on this trade, if you’re long at 10656, your stop would go below the 106 level.

Link to comment

Create an account or sign in to comment

You need to be a member in order to leave a comment

Create an account

Sign up for a new account in our community. It's easy!

Register a new account

Sign in

Already have an account? Sign in here.

Sign In Now
  • image.png

  • Posts

    • In times of inflation, it's clear that traditional savings can lose value quickly, so looking for ways to protect or even grow your money becomes important. A lot of people naturally think of investing in assets like commodities or stocks, which are popular options, but there are other approaches that can help as well. One option is to explore side gigs or freelance work, where you can make money now rather than waiting for long-term investments to pay off. With inflation affecting costs, it can be helpful to have multiple streams of income.
    • Seems Bitget strategic partnership with Ton ecosystem is paying off as Bitget Wallet Lite mini, hits more than 6 million users in 3 days. On Oct. 31, the exchange announced the official launch of Bitget Wallet Lite, a multichain wallet integrated into Telegram, allowing users to buy, store and send crypto within the app. Few months ago, the exchange launches $20M TON ecosystem fund and also TON network secures $30M investment from Bitget and Foresight Ventures, this led the wallet to surpass Metamask in adoption rate. Some users have shown preference to the wallet as compared to Okx and Binance wallet, could it be the friendly nature or ease to connect Ton project? A recent study shows that the wallet impressive growth cut across emerging markets like Africa, South Asia, and the Middle East, could it be the surge in Ton project that is responsible for this feat? The study also claims that the wallet support for over 100 blockchains, and a wide array of DApps, makes the wallet appealing to a global audience. It further claimed that the wallet support for DEX trading, including features like zero gas fees in certain transactions and instant trading modes could be responsible for the surge in users. https://cointelegraph.com/news/bitget-wallet-telegram-6-million-users-three-days
    • Really interesting analysis! I’m with you on being bullish on SOL its performance lately has been impressive, and the technicals are giving all the right signals. The RSI’s upward trend and strong buying volume suggest that there’s real momentum here. Even the recent sell-off by that whale doesn’t shake my confidence; if anything, it reinforces how much profit and growth potential Solana has delivered in a relatively short time. The network activity bringing in $25 million in profits is no small feat either, and it’s part of why I see SOL as a strong long-term play. With it still trading well below its ATH, I think there’s serious room for growth, especially if it breaks that $200 resistance. Plus, seeing the ecosystem mature with more use cases and sustained whale activity really solidifies SOL’s staying power in the competitive blockchain space. This could be one of those correction opportunities that we look back on and wish we’d gone in even harder. Definitely keeping my eye on it for future dip
×
×
  • Create New...
us