USDCNH testing previous low with potential 1000bps drop!
Hello everyone. I know the title looks too exaggerated. Would the dollar be so weak? Possible.
I remembered a friend seek my view on USDCNH 1 month ago when the pair was around 6.56. I was confident about the dollar index and told my friend that it might go to 6.68 level.
But I was wrong. Why? Because something important happened on April 1st. If you check the dollar index , it started to fall from that date. Without the events, I would be confident to be bullish on the index because of momentum, my dual-moving average system.
So, what was the event that triggered the weak dollar since then?
President Biden to unveil 2 trillion dollar infrastructure plan.
Look at that number! 2 trillion dollars plan. The massive stimulus plan would weaken the dollar index with no doubt similar to momentary easing policy. It smashed supply & demand, momentum and dual-moving average system combined.
So, my point is that do check the news or big numbers released on top of your technical analysis to increase your winner ratio. Be mindful of your confirmation bias and overconfidence.
The recent low is around 6.42. Once that level couldn't hold, the next key levels are 6.38 and 6.33. So, technically, it might drop by 1000 bps from the current level.
What might change the situation? Better-than-expected key US economic data and rate hike. Until then, dollar would be weak with downtrend continuation patterns.
I remembered a friend seek my view on USDCNH 1 month ago when the pair was around 6.56. I was confident about the dollar index and told my friend that it might go to 6.68 level.
But I was wrong. Why? Because something important happened on April 1st. If you check the dollar index , it started to fall from that date. Without the events, I would be confident to be bullish on the index because of momentum, my dual-moving average system.
So, what was the event that triggered the weak dollar since then?
President Biden to unveil 2 trillion dollar infrastructure plan.
Look at that number! 2 trillion dollars plan. The massive stimulus plan would weaken the dollar index with no doubt similar to momentary easing policy. It smashed supply & demand, momentum and dual-moving average system combined.
So, my point is that do check the news or big numbers released on top of your technical analysis to increase your winner ratio. Be mindful of your confirmation bias and overconfidence.
The recent low is around 6.42. Once that level couldn't hold, the next key levels are 6.38 and 6.33. So, technically, it might drop by 1000 bps from the current level.
What might change the situation? Better-than-expected key US economic data and rate hike. Until then, dollar would be weak with downtrend continuation patterns.
Comment:
6.38 got hit. The first target reached!
plan your trade and trade your plan
