USDCHF at cross road. Up or down?
USD weakness was the reason for the slide in USDCHF in recent days. Lack of SNB presence in the EURCHF is not helping the USDCHF. The breakdown in USD index twice last week at 95.70/75 and 94.65/70 level on Friday sealed the USDCHF's fate. However, at the 0.9200 handle, USDCHF is clinging on to dear life! Do we see further crash down from here as stop sell perpetrated the market next week or we see a rebound in the USD from here?
I am torn. No matter what the USD weakness has been a major mkt trend for the past few weeks or even months that has shown no reprieve. Risk on and the dislodgement from the reality of the world and the equity market has made risk on in the equity and hence sell off in the USD something I cannot understand. However, last week, I am sensing that a sell off in the equities market can start to happen soon. NASDAQ should lead the sell off given that it has surged relentlessly for mths. Tesla shares is at a ridiculous level in my opinion when it surpassed JPM mkt capitalisation! That is mind blowing and is that a bubble in the market? IF the equities is to get sold off, is the USD going to be a sell of a buy? Judging from past behaviour in risk on and off, the logical explanation is that it should be a buy. However, I am also sensing that the mkt is taking this deterioratingUS data into deeper consideration at this stage and that explain why we are not seeing a full fledge buying USD in a risk off environment as of last week. In Addition, US is really not coping with covid 19 very well. While the rest of the world is seeing a 2nd or 3rd wave, US is still not over with its first wave. The relative play can means USD is a sell?
Next week, we have the all impt FED rate decision and US GDP data plus a couple of important data coming out from the EZ. shall the data deteriorated for US further, it is a certain the Powell will be the dovish dove once again. What can transpired is everyone imagination? Maybe now they will start to buy equities? What else cant they buy when they are interfering with the corporate bond market already?
I am leaning towards the SEll USD camp from here. Given that the close in the DXY and EUR and AUD is not exactly pretty for the USD bull, What do you think?
I am torn. No matter what the USD weakness has been a major mkt trend for the past few weeks or even months that has shown no reprieve. Risk on and the dislodgement from the reality of the world and the equity market has made risk on in the equity and hence sell off in the USD something I cannot understand. However, last week, I am sensing that a sell off in the equities market can start to happen soon. NASDAQ should lead the sell off given that it has surged relentlessly for mths. Tesla shares is at a ridiculous level in my opinion when it surpassed JPM mkt capitalisation! That is mind blowing and is that a bubble in the market? IF the equities is to get sold off, is the USD going to be a sell of a buy? Judging from past behaviour in risk on and off, the logical explanation is that it should be a buy. However, I am also sensing that the mkt is taking this deterioratingUS data into deeper consideration at this stage and that explain why we are not seeing a full fledge buying USD in a risk off environment as of last week. In Addition, US is really not coping with covid 19 very well. While the rest of the world is seeing a 2nd or 3rd wave, US is still not over with its first wave. The relative play can means USD is a sell?
Next week, we have the all impt FED rate decision and US GDP data plus a couple of important data coming out from the EZ. shall the data deteriorated for US further, it is a certain the Powell will be the dovish dove once again. What can transpired is everyone imagination? Maybe now they will start to buy equities? What else cant they buy when they are interfering with the corporate bond market already?
I am leaning towards the SEll USD camp from here. Given that the close in the DXY and EUR and AUD is not exactly pretty for the USD bull, What do you think?
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