Next week should be big for the US Dollar. FOMC is on Wednesday and Non-farm Payrolls on Friday, both big drivers for US markets.
Today was meaningful as the bullish trend in USD put in a significant jump, currently showing as a bullish engulf pattern after yesterday saw the currency push down to fresh monthly lows. Buyers held support above the trendline and a strong pop on Friday erased the earlier-week losses and then some.
Bullish engulf patterns often point to continuation potential and in this case, that would be in the direction of the topside, bullish trend.
Likely, on Wednesday, we'll hear the Fed announce the start of asset purchase taper but perhaps more importantly is the criteria they set forth for hiking rates. At this point, the Fed has forecast one rate hike in 2022 but markets are already pricing in more, largely in response to inflation.
for USD strength - GBP/USD is attractive as the pair is working on an evening star formation on the weekly chart. And USD/JPY is perhaps even more attractive as the pair has so far correlated well with the rates theme, and USD/JPY is putting in a falling wedge after setting a fresh four-year-high just last week.
Today was meaningful as the bullish trend in USD put in a significant jump, currently showing as a bullish engulf pattern after yesterday saw the currency push down to fresh monthly lows. Buyers held support above the trendline and a strong pop on Friday erased the earlier-week losses and then some.
Bullish engulf patterns often point to continuation potential and in this case, that would be in the direction of the topside, bullish trend.
Likely, on Wednesday, we'll hear the Fed announce the start of asset purchase taper but perhaps more importantly is the criteria they set forth for hiking rates. At this point, the Fed has forecast one rate hike in 2022 but markets are already pricing in more, largely in response to inflation.
for USD strength - GBP/USD is attractive as the pair is working on an evening star formation on the weekly chart. And USD/JPY is perhaps even more attractive as the pair has so far correlated well with the rates theme, and USD/JPY is putting in a falling wedge after setting a fresh four-year-high just last week.
