Are you seeing what I’m seeing?
If you take a look at USD/CHF’s daily time frame, you can see that USD/CHF is headed fast for the .9950 psychological handle, which lines up with a resistance level that was stronger than the Obama-Biden bromance for most of 2016.
This time around the .9950 area also lines up with not only the 50% Fibonacci retracement as well as the 100 and 200 SMAs on the chart.
Oh, and look at stochastic chillin’ like ice cream fillin’ on the oversold territory!
The fundamental analysis part is where it gets iffy. On one hand, Janet Yellen and her gang are at their most hawkish in YEARS, believing that Uncle Sam has all but reached the Fed’s inflation and employment goals.
Of course, it also doesn’t hurt that market players are still optimistic that Trump will make good on his campaign promises to increase fiscal stimulus.
On the other hand, there are also Trump’s policy biases, such as ramping up trade protectionism, that could hurt the Greenback.
Some even talk of the Trump admin possibly favoring a weaker dollar, as it would give the U.S. exports extra boost against its major trade competition.
In fact, U.S. Treasury Secretary nominee Mnuchin already noted that an “excessively strong” dollar would hurt the economy in the short-term.For now, I’m keeping close tabs on this setup for a possible bounce. Maybe scale in as soon as the bears fail to break below the support area?
If the dollar’s selloff doesn’t let up in the next couple of days though, then I’ll take it as a sign that uncertainties over Trump’s next decisions are trumping (pun intended) the Fed’s hawkishness as the dollar’s mover.
What do you think? Will the dollar get back on its feet anytime soon?
Or should I focus my energies on finding anti-dollar setups like EUR/USD’s short-term uptrend seen below?
Lemme know what you think!
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