This is a preliminary analysis of what the future will hold for USD, The USD appears to be gathering strong relative strength. USD/CHF is signaling a possible progression up from its base formation. USD/JPY appears to be entering a new time sale range. Between 120-117. Many who are looking to sell this pair short may be fighting its relative strength.
It is still prudent to wait for a break down before position trading this pair. I feel many are waiting to do this exact same thing. Today they couldnt even manage to take out the 117 even stops even though an attempt was made. I fear GBP and EUR collapse will signal the bullish capitulation spike up for the USD. As for the present moment, the GBP.EURO are being yo yoed to shake people out of the USD.JPY .and USD.CHF positions.
The lowest risk and the highest reward trade, will be when the GBP..EURO spike up, pressuring USD down, then entering the USD versus JPY or CHF positions. Next week will be filled with data, and this will be the week people can make 100-200% for the week. The reports can be used to enter USD long positions on a USD spike down.
The bond market has not retraced at all, and is ripe for a correction, as you see bond rates rise, the USD prospects get even better, since a FED tightening will be more likely in the future. This will lead to stock market losses, as people find that interest rates might edge up higher. Gold is entering a seasonal strong period. Oil will be supported by events in Iran.
In summary. USD remains strong, and the upside is only starting. But to enter the lowest risk reward trade, one should wait for retracements in the pairs before entering USD long positions otherwise your position will be blown by stop hunting.
Chris
It is still prudent to wait for a break down before position trading this pair. I feel many are waiting to do this exact same thing. Today they couldnt even manage to take out the 117 even stops even though an attempt was made. I fear GBP and EUR collapse will signal the bullish capitulation spike up for the USD. As for the present moment, the GBP.EURO are being yo yoed to shake people out of the USD.JPY .and USD.CHF positions.
The lowest risk and the highest reward trade, will be when the GBP..EURO spike up, pressuring USD down, then entering the USD versus JPY or CHF positions. Next week will be filled with data, and this will be the week people can make 100-200% for the week. The reports can be used to enter USD long positions on a USD spike down.
The bond market has not retraced at all, and is ripe for a correction, as you see bond rates rise, the USD prospects get even better, since a FED tightening will be more likely in the future. This will lead to stock market losses, as people find that interest rates might edge up higher. Gold is entering a seasonal strong period. Oil will be supported by events in Iran.
In summary. USD remains strong, and the upside is only starting. But to enter the lowest risk reward trade, one should wait for retracements in the pairs before entering USD long positions otherwise your position will be blown by stop hunting.
Chris
Price is the only indicator.