It’s a short trading week due to the long Memorial day weekend, but it’ll be a volatile week with an employment data for May on Friday. The dollar looks like it’s holding it’s weight and attempting to hold it’s strength. There’s a high probability for an upcoming rate hike so it’ll be interesting to see how the dollar reacts in the anticipation.
The dollar seems to be showing strength and has not had a major down day this week. The continuous days of rising shows that the mini rally can turn into a possible reversal. It’s going to be very important to see where this dollar pulls back to but judging by the recent price action, it’ll be fairly deep.
The dollar finished lower after the FOMC minutes due to some passive tones. A June hike is still on the table but looks like the Feds are taking it cautiously. Data will be the main deciding factor and until June, it looks like there’s a slightly uncertain potential for a rate hike. Given today’s reaction in the dollar, I would personally be wary of longing dollar here.
The pullback finally happened after an extensive push by the dollar bears. This can be a momentary breather from the bears before the next leg down or it can be a start to the reversal fade. Will be keeping an eye out for possible big moves.
Last week was when dollar was heavily sold with EUR/USD continuously making previous day highs. I feel like this week is a new week where the dollar bears will take a breather and test previous supports it broke. The dollar can continue to fall but it’s very unlikely that it’ll have the same strength as last week without testing some previous levels before. I’ll be on the look out for potential reversal set ups.
The dollar bears finished the week strong by pushing other pairs below. My mistake today was trying to force a USD/CHF long before it was ready to jump. This week would’ve been a great week to ride the trend, but I feel like traders naturally look for a better R:R and may be fooled into taking a counter-trend trade. Always be patient with trends and never force trades.
The dollar is still down but I couldn’t find a good place to short because it’s still taking trend from yesterday’s move. I was waiting for a pullback to enter in a USD/JPY short but didn’t get any good opportunities. I tested out some EUR/USD short and USD/CHF longs to test a dollar bottom but still looks like it’s wishful thinking. The stock market crumbled today with the vix flying, tensions are high in the markets.
The biggest mover this week is the EUR/USD rally that has been showing no weakness since the last couple days. It’s been consistently making new highs while other dollar pairs has been stuck in limbo. Luckily, volume has been looking better today as USD/JPY finally snapped down with other dollar pairs to follow. Finding a bottom on dollar seems very risky now so looking to scalp the shorts.
Markets still haven’t been moving much during NY session. I haven’t had the time to trade London session but since the FOMC statement 2 weeks ago, volatility has been dull. Hopefully things start to pick up and break out soon. I’ll try to trade London session again if things are continuously slow.