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What is the USD doing?


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US Non-Farm Payrolls for December are released today at 1330 GMT. Unemployment rate of 6.8% est., Watch out for this if you're holding anything that may be impacted by the announcement. 

Well it's definitely going up @Nelsy-Boy...  But seriously folks, looks like the Weekly Triangle line on the EURUSD held firm as resistance this time, sending price back down but will it turn back bef

Before it was potential.  Now it is confirmed.  USD is one of the biggest broad market influencers.  I wonder what other pivots a significant USD bearish phase will reveal? 

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For me USD is still in a rally phase, although we are currently seeing a bearish retrace, which looks like it should be an EWT 3-4 of the bullish phase that, when concluded, ought to usher in a significant period of bearishness for USD.  I am expecting that Trump will get his way (a lower USD) as the Fed are forced to bring in more and more dovish policy to combat the extreme policies of Japan and the EU and the more recent accomodative reaction of the Chinese to the conora-virus difficulties, although I expect they would have done this anyway.  I am expecting the US economic data to falter again after the end of year throwing of the kitchen sink by C-Suites to bump up the final numbers causes a Q1 rain shadow and an eventual slip into recession.

From a technical perspective (and this can be seen mirrored on EURUSD in particular):

  • Price is contained within a weekly/monthly chart rising Triangle, the upper line of which is very strong.
  • The EWT count looks like a 1-5 (blue) so the current phase could be the final wave 5.  If so we can expect a 1-5 profile with the Fib 76/78% resistance zone around 100.
  • There is very strong NMD on the weekly but not yet on the Daily, which suggests another leg up on lower momentum to trigger a daily NMD at the turn.

Overall I am expecting a USD capitulation to have a massive impact across capital markets, as much because of the drivers of such a trend change as the impact of a lower USD.  I do expect the current rallies in GBPUSD and EURUSD to be short lived but both USDCAD and USDJPY are at important pivotal points from a technical perspective and could turn earlier than the others.

DX-Weekly_220220.thumb.png.278db491cf65dcd87935b3e6ff41576f.pngDX-Daily_220220.thumb.png.91b58d58a52f9a548fb9e1144c6e6407.png

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16 hours ago, Mercury said:

Overall I am expecting a USD capitulation

Won't happen.

Who will take over from the mighty dollar?

Europe? 🤣

China? 🤣🤣

Russia?  🤣🤣 🤣

Little England?  🤣 🤣 🤣 🤣 🤣 🤣

 

I tell you what though ... when Bernie Sanders becomes President, the rich will have a HUUUUGE temper tantrum and throw all their toys out of the pram ... but the working people will take over :D:D:D

Edited by dmedin
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Gotta say USD looks to have turned earlier than I thought it would, mostly EURUSD driven it seems.  Looking for a relief rally before things really get going with EURUSD current on a key LT resistance trend line and GBPUSD still looking bearish and USDJPY rallying behind a stocks buy the dip but when the relief rally is over then I think GBPUSD Longs will be the place to be and if this is correlated with a major stocks bear turn then USDJPY Short will also be a good bet.  I do not thing EURO is the place to be.  AUDUSD might work also.

DX-Daily_020320.thumb.png.58f96a1a46f097e43c52d251b18f8ebd.png

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24 minutes ago, CharlotteIG said:

US stocks soar

To be fair, 'soar' is an impression given by 1 minute chart which is pretty extreme (I've never heard of a successful investor who traded on 1 minute charts, although some traders claim to be able to do it).

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Just now, dmedin said:

To be fair, 'soar' is an impression given by 1 minute chart which is pretty extreme (I've never heard of a successful investor who traded on 1 minute charts, although some traders claim to be able to do it).

Yes this is true, fast bull movement would have been a better choice of words

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2 minutes ago, CharlotteIG said:

Yes this is true, fast bull movement would have been a better choice of words

On the 4 hour chart there's an indecision candle forming so I closed out to wait and see which way it resolves on ...

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US news this afternoon: 

13:30 GMT: 

USD Nonfarm Productivity (Q4)

Prev: 1.4%

Est: 1.4%

 

Initial Jobless Claims (Feb 28)

Prev: 219K

Est: 215K

 

USD Unit Labor costs

Prev: 1.4%

Est: 1.4%

 

USD Initial Jobless Claims 4-week average (Feb 28)

Prev: 209.75K

 

15:00 GMT:

USD Factory Orders (MoM) (Jan)

Prev: 1.8%

Est: -0.1%

 

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USD bear turn looks complete to me, a little under my 10,000 target but no matter.  After such a near vertical initial move I am waiting for the inevitable relief rally, although at this stage I am leaning toward this being relatively shallow, maybe to the Fib 38% levels rather than a 50 or 62 but let's see.  Not saying the wave 1 turn is in yet but the pin bar price action on the daily on Friday could be setting up the turn, however the lack of a clean PMD (NMD on FX pairs) makes me thing we could see another lower low before the turn.  For me I don't much care because I would be seeking to enter/add to FX pairs (preferably JPY and GBP) after said pull back not to trade the pull back itself so wait and see is my approach.

If we look back at the bigger picture that A-B-C (Purple) is very much on, which places the markets in a wave C of B.  The turn into wave C seems conclusive enough to me now just about tracking for a pull back entry point to get in on a decent wave 3 of C bear run for USD which could move quite quickly.  Such a move would deliver many 1000s of points on key FX pairs and I see GBP doing better than the Euro.  I don't see USD turning into it's big Bull phase until the Donald looses control of the Fed and/or the country (Biden is the bookies favourite apparently) AND stocks show a significant bearish trend, dare I say crash.

DX-Monthly_070320.thumb.png.e51c4bc713fb46b618e81427de865a85.pngDX-Weekly_070320.thumb.png.85641a76af1f9739135344aba278094f.pngDX-Daily_070320.thumb.png.156e6f04362c3789b5fa4152f6bb01e7.png

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10 minutes ago, CharlotteIG said:

image.png

US rallying sharply against other currencies but not much impact on indices. 

 

 


Demand for USD - obviously not for use in buying U.S. shares - must be going somewhere else.  U.S. government bonds?

Pound and FTSE both falling.  What does that mean? 😱

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  • 3 weeks later...
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Leading up to Nonfarm Payroll today at 13:30 BST, we have a report preview, twitter poll and of course at 13:25 we will have a live IGTV video on the platform. 
 
US jobs report preview: will US unemployment hit 20%: below you can find a small part of this article but click the link if you want to see more. 
 
image.png
 
 
Our IGTV Live video can be found on the platform. 
 
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  • 4 weeks later...

Very sceptical article from Reuters:

Quote

July 2 (Reuters) – Financial market rallies built on stimulus stemming from negative events are apt to burst and prompt a rebound in the U.S. dollar, which is the chief beneficiary of turmoil.

Stock markets and commodities have soared but little of those gains were due to positive news. Rallies have been borne out of hope or based on the example taken from rallies inspired by stimulus after 2008 when the financial crisis hit.

There is one big difference. Toady's' rallies have happened far more quickly and in an almost reckless desire to brush aside the impact of the coronavirus.

That's a mighty gamble. In 2008 economies were severely damaged but never closed altogether. In 2020 many major economies virtually stopped.

This year the dollar rose 6.4% then dropped 3% after April. Betting has swung hugely. USD 17 billion is now staked on a drop after USD 18 billion was wagered on the dollar rising in February.

The dollar can drop a further 2% and the total decline from 2020's peak would still represent a correction of this year's rise and would also meet the minimum objective for a technical correction of its rise from 2018's low.

It's a good spot to back a rebound.

For more simply click on FXBUZ

 

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