+ NOK inflation above consensus 3.4% (yoy) -> fundamental support +/- DXY in sideways around 95 level + September 20th interest rate decision: hike to 0.75% expected -> market hasnt priced it fully yet - Double top too obvious -> short stops still can be hit - 50d EMA is near support -> breakdown needed
USD unable to find direction, however, 100DMA is a support for the time being. -> last weeks EUR, GBP, AUD breakouts will probably fade.
This connect to my daily USDNOK short
USD/HUF reversed like in the textbooks (XABCD) till 161.8 Fib. The bullish trend still has rate differential support with Fed not being afraid to hike further despite Trump rhetoric. Next level is 295 previous high.
SEK is in free fall, divergence from 200d EMA is 11% ! EURSEK reached 9-year highs Sept 9. election may result in a deadlock -> anti-establishment party might advance Action: I will wait to see even more blood and eventually look for entry setup to short EURSEK .
Retail traders position on EURUSD: 60% is short Trendline break with a supportive candle Divergence from 200d EMA
+NZD is undervalued by 4% (from 200d EMA) -> buying dip, bullish correction +H4 Cuphandle formation supports breakout -Unfortunately, most of retail traders are long (74%) - > chance of fake-out
USD made a huge HS downward correction, it is taking a breather now. Neckline on H4 has been retested, break above would mean a pullback above 95 levels. In case that falls, I am keeping my swing trade dollar short positions.
Second attempt to break down the 0.9810 level 3 months in sideways but highs coming lower and lower - > sign for break down Target: 50% Fib retracement
USDNOK has 3.5% divergence from the 200D EMA -> not extreme, still can grow bigger to the upside Wait until lower timeframe resistance falls.
+Fundamentally US macro data is supportive for $, just as Fed communication. +Trump comments could not harm the greenback. +100% Fib level retested after breakout +50D EMA holds as support -USD rally seems to get stretched a bit -Uncertainty around Trump persists -> uncertainty for USD
Gold short positioning getting stretched -> short squeeze Stronger US inflation failed to lift USD -> inflation growth, Fed policy priced in
I will wait if 50 ema holds, and see if larger divergence from 200 ema occurs. Looking for levels breaking above 95 resistance...
Don't trade USD pairs until fake-out zones tested in the initial reaction.
HUF is an emerging currency, with no positive carry value -> risk-off sentiment = sell HUF The economy is export driven, weaker HUF does not hurt the government in the short run Monetary policy divergence got stronger Cons: - NBH can decide to verbally intervene in the HUF market especially because of EURHUF rate
Key points: -USD (DXY) weakening needed -Bond yields capped (US 10yr below 3-3.1%) - negative risk sentiment
Fundamental drivers: -Safe haven flows -> trade war fears pressuring equities, negative sentiment -Hawkish FED -Positive economic surprises from the US -Carry trade -Retail traders position: USD short (myfxbook EURUSD 67% long) Cons: - Trade war fears might deescalate -> big relief rally
What points to USD strength fundamentally: - Monetary policy: FED rate median is at 2.15% end of 2018 vs ECB expected to hike only 2019 Q4 -> carry on USD side - CB balance sheet: FED BS decreasing since 2017 May, ECB still rising, tapering expected in '18 Sept - Inflation: US Core inflation 2.1% and forecasted to 2.4% vs Eurozone 1.1% and moderate upward...