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Strength

Is a Dollar surprise coming?'Everybody' knows that the US Dollar is gonna die. Right? The prevailing wisdom is that QE Infinity will tank the Dollar. Well, it's not that simple. The Dollar's strength depends on numerous other factors, the key one is demand. Ahhhh.. so the USA - if you believe it - has conquered COVID-19, and international trade is about to be kickstarted. Or so the story goes. Whilst I'm sceptical, it could be true for a while. Lets say over the next two quarters. If a surge in demand happens - USD being liquid gold after the Gold Standard was abolished many moons ago. The chart shows that there is a 4 hour trend (amber line) heading north. Yes - it could fail, but the probability at this point is for the north. Sure - enough it may bounce through the trend line south and then rocket north. DXY is a wild one, so anything is possible. But what does that mean if USD strengthens over the next two or three quarters? It means there will be bearish pressure on stock indices, metals and some commodities. Bearish pressure doesn't mean they're all gonna correct. It's not that simple. What's the point of watching the USD in the DXY? Well you also gotta watch USD priced forex pairs. It gets complicated because USD affects stock indices which in turn affect forex. What does it all mean? It means 'avoid over confidence' in trading. Small profits taken from small position sizes across much volatility is no bad thing. They all add up. Large position sizes in a higher volatility is a good way to burn and account. Stay safe. Wash your hands. Protect your account. Avoid FOMO. Don't burn cash! Is that okay? Disclaimers : This is not advice or encouragement to trade securities on live accounts. Chart positions shown are not suggestions. No predictions and no guarantees supplied or implied. Heavy losses can be expected if trading live accounts. Any previous advantageous performance shown in other scenarios, is not indicative of future performance. If you make decisions based on opinion expressed here or on my profile and you lose your money, kindly sue yourself.
TVC:DXY
by Captain_Walker
29
Sterling succumbs to the Buck in the run up to the BoE policy...Sterling succumbs to the Buck in the run up to the BoE policy announcement where eyes will be fixated on commentary on the feasibility of NIRP for the banking sector if required, although the immediacy of such policy is likely to be downplayed by the MPC. Meanwhile, markets currently pencil in incremental negative rates for August. Cable has descended from its 1.3683 high, through its 21 DMA (1.3645) to trade sub-1.3600 as keeps its 50 DMA (1.3540) on the radar. 1.3800 Overall upside target.
Long
by FTUKcom
14
Stocks to Watch Relative Strength Edition The Market is showing some questionable activity, this week I expect the market to by choppy. This is the Relative Strength Edition of Stocks to Watch. This may give good risk/reward entries on some of the best names. Some of these charts still need to confirm their price action. This video is my watchlist. Most of these names are at or near all time highs or multi year highs. There are 22 total stocks on this list. I add an additional 2 stocks that are on my potential short squeeze watch list. Many of these have IPO'd in the last few years and still have a growth story ahead of them. Know your time frame and risk tolerance. Know your earnings dates! I go through these quickly so grab a pencil and paper and jot down the names that look interesting to you and then make the trade your own. Good Luck!
NASDAQ:STAALong
by Jtacher51
4
Cable relinquish the 1.3700 handle for now...The writing was on the wall for the Pound after early UK data disappointment in the form of retail sales and public sector finances, but the so called flash PMIs were anything but, and have seen Cable relinquish the 1.3700 handle, while Eur/Gbp has rebounded to 0.8900+ from its pre-ECB low around 0.8830. Another downturn in broad risk sentiment, softer crude and commodity prices have combined with a retreat in several currency counterparts to save the Buck from a further collapse, while perma bulls may also derive more encouragement from the fact that the DXY fended off the latest attempt to flush out underlying and psychological bids at 90.000, albeit even more narrowly (at 90.039 vs 90.043 yesterday). Indeed, the index and Greenback overall remain depressed, with rebounds running into offers at increasingly lower levels and readily, ie 90.286 so far compared to 90.454 on Thursday and 90.699 the day before. Ahead, US Markit preliminary PMIs and existing home sales are scheduled and could provide impetus, but perhaps on the good news is bad and vice-versa mantra for the downbeat Dollar.
Short
by FTUKcom
4
The Dollar remains on track to record net and widespread gains..The Dollar remains on track to record net and widespread gains, but it’s been far from one-way traffic or straight forward as the DXY has whip-sawed within a 90.762-89.922 range through mostly disappointing US data, mainly dovish Fed rhetoric and President-elect Biden’s fiscal stimulus plan that was pretty much as expected. Meanwhile, broad risk sentiment has turned more selective in terms of stock indices and sectors as reflation positioning continues before the dawn of a Democratic Congress, and Treasury yields have also reflected the prospect of increased issuance to fund a bigger budget deficit via deeper bear-steepening until a retracement after auctions and a concerted effort from the Fed, including chair Powell to avert a taper tantrum. On the COVID front, the spread in the US and elsewhere is still accelerating to record levels of infections and fatalities in some domains, but markets (and society in general) are looking beyond the resurgence towards light at the end of the tunnel as authorities attempt to catch up by speeding up the pace of vaccinations. However, Friday’s Greenback appreciation has been forged from renewed safe-haven demand as equities retreat further from early 2021 and/or all time highs on a mixture of doubts about the aforementioned relief bill getting approval in its current guise and whether vaccines are effective against the new pandemic strains, not to mention reports that Pfizer may miss some drug delivery targets over the coming weeks.
TVC:DXY
by FTUKcom
4
GBP/JPY - a new addition to my watchlist...The non-Dollar G10s have largely been at the whim of their US peer, with intermittent diversions and deviations, as the POUND kicked off 2021 on a firm footing after the UK and EU managed to pull a Brexit deal out of the bag just before the New Year’s Eve transition deadline. Cable peaked just over 1.3700 and Eur/Gbp troughed around 0.8945, but it’s been a case of Sterling erosion since the festive season ended due in part to a 3rd national lockdown and growing concerns over the fallout from a new more transmissible strain of COVID-19. Similar story for the EURO after a couple of efforts to breach 1.2350, as tighter virus restrictions offset any good news in the form of data, and Eur/Usd has subsequently lost momentum through the 10 DMA to rigorously test the resolve of bids into 1.2200 and the 21 DMA. Elsewhere, the YEN and FRANC have fallen foul to the aforementioned avid risk appetite, with the former also conforming to UST-JGB yield differentials as Usd/Jpy rebounded sharply from 102.60 to almost 104.10 vs Usd/Chf’s 0.8758-0.8884 extremes. Gbp/Jpy currently is showing the highest probability of a volatile move inline with the multi-month highs being breached. 130 pips is on the books.
Long
by FTUKcom
4
GBP leads G-10 as Bailey highlights adverse effects of rates..The major beneficiary of the waning Buck as Cable retests 1.3600 from almost the big figure below at one stage, but the Pound has also rebounded in relation to the Euro from circa 0.9000 to 0.8950+ at best in wake of remarks from BoE Governor Bailey highlighting plenty of ‘issues’ on the controversial subject of NIRP, adding that it is too soon to determine whether the economy needs more stimulus. For the record, MPC member Broadbent steered clear of negative rates in a speech on the coronavirus and consumption. The simple long scenario would be waiting for this pair to squeeze up beyond 1.3600 on the hour and the hour descending trendline.
Long
by FTUKcom
2