While in FOMC Minutes yesterday, FED was more confident and more hawkish than ever. The probability of December rake hike raised as a result and we all believe that they will finish this financial year by a rate hike decision. But why traders SELL Dollar instead of BUY ?
THE MAIN REASON ACCORDING TO MY VIEW:
- A Technical correction after soaring strongly.
- High demand of market.
December rate hike is definite, but what traders need is an answer for this question: DO FED COMMIT TO REGULATE MONETARY NORMALIZATION STEADILY OR JUST ONLY ONE RATE HIKE ?
Because they only have one asset to BUY : USDollar as well as US Stock, they need to be ensured that their invest could make profit, so this high demand is understandable.
USDollar bounced agressively when it tested the resistance near year high. 100 is indeed a strong resistance, while we need more fuel and catalyst, a correction is acceptable, but I still believe in a long term rally of USDollar .
98.5 is 23.6% Fib retracement level, I think USDollar retracement should be limited at this level.
HERE IS MY VIEWPOINT: A TECHNICAL CORRECTION , HIGH DEMAND FROM TRADERS ARE GOOD REASONS FOR THE CORRECTION OF USDOLLAR , BUT I DON'T BELIEVE THIS IS A LONG TERM TREND. BUY IN DIP AT 23.6% FIB RETRACEMENT OR AT 98 LEVEL.