The main reasons according my view:
- Firstly, lacking of US data make traders to hesitate in buying Dollar.
- Secondly, the ongoing devaluation of Renminbi increases the fear about incoming depression.
I think the major reason is the devaluation of Renminbi and China Equity market.
Yesterday, when PBOC devaluted its currency, some people talk about this depreciation is a catalyst for USDollar rally; however, I don't think this viewpoint is right. PBOC devalutes Yuan to offset the loss of export sector : China economy indeed is in depression : AND THIS INTENSIFIES THE FEAR. Economists worry about China depression spreads out to world level and plunge others economy including US.
One more reason, the China depression could postpone FED rate hike.
THAT WHY TRADERS SELL AGGRESSIVELY USDOLLAR TODAY.
Tomorrow, the main focus is that US Retail Sales. I believe US Retail Sales would be positive following positive US CPI .
However, I don't sure positive US Retail Sales could send support to greenback if traders still think about China problem.
IN THIS CIRCUMSTANCE, EURO SHOULD BE TRADE HIGHER VS OTHER CURRENCIES.
EURUSD borke three strong supports:
- Kumo cloud.
EURUSD had had one month trade below Kumo cloud, with the break Kumo today,I think it should stay above the cloud.
I see SMA200 is at 1.1400 level, EURUSD is on the way to that level.
It seems I denied the fact that Euro is becoming a funding currency.
When I begin to shift my viewpoint, market was pricing fully.