Dollar has weakened significantly since mid NOV-22
Driven by institutional selling of long contracts since begin Q4-22
Assisted by accumulation of short contracts sinds JAN-23
Outlook for Q1-23 remains sideways to down
Next downside level is 99.60
FOMC & NFP:
Before another drop below 100 big figure a retrace is likely
103+ will likely be mitigated in FEB
103 = mitigation level = GAP resistance = sell VWAP
Begin FEB is pivotal week(s) with FOMC & NFP
FOMC and/or NFP volatility will likely facilitate the retrace
OUTLOOK:
Will be monitoring price behaviour between 103.00 - 103.25
Looking for change of behaviour on the lower timeframe (wicks into mitigation-level)
Anticipating a swing lower from 103+ to 100- after mitigation
This will offer buy setups in the MAJORS, with a preference for commodity CCY's
Comment
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- FOMC used to run stops below the market and lure breakout traders into shorts. - FED whisperers and talking heads helped talk Dollar lower. - NFP used to take the market by surprise and trap more traders short. - Looking for Dollar to mitigate 103+ level. - After that a break of structure to the downside is the signal to watch for possible continuation of the downtrend.