Today in the markets- Draghi killed the Dollar. Trading conditions were absolute mayhem and was not for the weak. Today’s move in equities and currencies did not make sense at all. Is the dollar overvalued? Are U.S equites over bought? Is the U.S in for another recession? Yellen couldn’t have been more clear about the December rate hike, yet Dollar and financial bank equites are falling. Draghi disappointed the EUR/USD shorts by not being too aggressive on his QE plans. Investors wanted a longer extension of the program with more money. The result of Draghi’s speech was a best day for Euro in six years and a complete crash in the U.S equities market.
I was long dollar, so my account got completely annihilated at this point. I wasn’t understanding how the Dollar continued to go down and down and my SL’s kept getting hit. There were probably short coverings and a lot of panic selling, but I really do not think the dollar should’ve crashed so hard on Draghi’s speech. I might be creating a bigger mess for myself, but I’ll trust that the NFP tomorrow will bring the dollar up; I’m holding my long dollar overnight. Also, in the grand scheme of things, Draghi is still dove and Yellen is the most hawkish she’s ever been. We’re still due for a rate hike and I’ll be long dollar until then. It’s still crazy to see how sometimes finance does not make sense at all. Like one trader told me, “Trading is a F*cked up job”.
How’s that for a 3% EUR/USD gain in a single day. But notice where it bounced? Congrats to anyone who caught the big move…