The Dollar train has been steaming along in the last few trading sessions after Trichet’s comments on Eurozone growth. While it has been a good trade to go with the momentum, it may be a bit more prudent to watch the majors at this point as the Greenback has made such a significant move in a relatively short period of time (around 500 pips against the Euro in a few days).
I will continue to watch the majors, in hopes of seeing a pullback to possibly catch a new leg of the US Dollar’s momentum. With so much uncertainty of the future outlook on growth, inflation, and interest rates, it’s also a possibility that we may see a return to ranging behavior. Who knows what may be, but this week should present more volatility and opportunities as we see lots of data including CPI, retail sales, trade balance, etc. from the majors.
Stay tuned for new ideas, good luck and good trading!