- Fundamental Analysis
USDollar today hit one month low and it seems the drop is not over. Why do traders sell greenback aggressively while the prospect of rate hike decision next week is so bright ?. There are three reasons contribute to this ongoing decline of USDollar :
- Firstly, we must acknowledge that traders concentrate in the time frame of next rate hikes not only one rate hike because they only buy Dollar as long as Dollar rises; if FED don't maintain the heat of Dollar, investors will not BUY greenback. Recent days, we witness oil price fell intensively and backed to 6 year low, if energy price falls down, inflation will be damaged, so FED want to wait for the recovery of energy price then back to the 'liftoff'. The delay of 'liftoff' makes investors to hesitate in rebuy Dollar.
- Secondly, I want to talk about carry trade. Today, RBNZ cut rate by 25bp to 2.5% and signaled that they wanted to keep rate at that level; it means they will not cut rate at least till next year. RBA also want to keep rate at current level. Hence, we see the rate of NZ and Australia at least is stable and still higher than US rate. Recent days, I heard about carry trade comes back and the destination is Australia and New Zealand, so why don't we sell Dollar and buy Kiwi and Aussie ?
- Thirdly, we see that USDollar has rallied for 4 years, and it came to the peak. Profit taking is controlling market, that why I see bearish candlestick is very long.
In my opinion, I think USDollar will continue its downtrend.
- Technical Analysis
USDollar now stops at 50% Fib retracement level and Kumo cloud I draw on the chart.
While I see a strong support at around 96.500 where SMA200 and SMA100 is lying there.
Basic analysis, if USDollar breaks 50% Fib retracement, trend reverses.
And I am waiting that.
I expect USDollar first test strong support.
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Contact: admin@trackingforexsignals.com
Sforex Solution: Do the right thing – Think the right way
USDollar today hit one month low and it seems the drop is not over. Why do traders sell greenback aggressively while the prospect of rate hike decision next week is so bright ?. There are three reasons contribute to this ongoing decline of USDollar :
- Firstly, we must acknowledge that traders concentrate in the time frame of next rate hikes not only one rate hike because they only buy Dollar as long as Dollar rises; if FED don't maintain the heat of Dollar, investors will not BUY greenback. Recent days, we witness oil price fell intensively and backed to 6 year low, if energy price falls down, inflation will be damaged, so FED want to wait for the recovery of energy price then back to the 'liftoff'. The delay of 'liftoff' makes investors to hesitate in rebuy Dollar.
- Secondly, I want to talk about carry trade. Today, RBNZ cut rate by 25bp to 2.5% and signaled that they wanted to keep rate at that level; it means they will not cut rate at least till next year. RBA also want to keep rate at current level. Hence, we see the rate of NZ and Australia at least is stable and still higher than US rate. Recent days, I heard about carry trade comes back and the destination is Australia and New Zealand, so why don't we sell Dollar and buy Kiwi and Aussie ?
- Thirdly, we see that USDollar has rallied for 4 years, and it came to the peak. Profit taking is controlling market, that why I see bearish candlestick is very long.
In my opinion, I think USDollar will continue its downtrend.
- Technical Analysis
USDollar now stops at 50% Fib retracement level and Kumo cloud I draw on the chart.
While I see a strong support at around 96.500 where SMA200 and SMA100 is lying there.
Basic analysis, if USDollar breaks 50% Fib retracement, trend reverses.
And I am waiting that.
I expect USDollar first test strong support.
F.B page: www.facebook.com/trackingforexsignals (tinyurl.com/jxayluk)
Web page: www.trackingforexsignals.com
Twitter: twitter.com/SforexSolution
Contact: admin@trackingforexsignals.com
Sforex Solution: Do the right thing – Think the right way
