The dollar bulls has been keeping up a good fight but still far away from a confirmed reversal. It’s too early to long the dollar now but things are definitely at an interesting level. But the big news today was from the UK election which hit the pound pretty hard at the end of NY session. There are several outcomes that can come through from the election which will result in a lot of uncertainty for the future. Longing the pound here is would be a risky move.
I had some profits on scalping the GBP/USD before the whole fiasco but further selling does catch my eye. I’ll be looking at different pound pairs and see if they offer any shorting opportunities. As for the dollar, I’m still unsure about the bounce.
The GBP/USD got boosted almost 400 pips in London and New York session by Prime Minister May calling for a snap election in June. This news was completely shocking to the markets and was ultimately favorable for the Pound. May is known for her ability to negotiate well with the European Union so if she wins, it’ll be very beneficial for UK and their Brexit strategy.
I unfortunately missed most of the EUR/USD and GBP/USD rally but had some fun with AUD/USD longs. In the hopes of a lag trade, I longed the AUD/USD on a strong support and pretty much held it throughout NY session, for the final dollar leg down. The dollar can still continue to move on south, but I do suspect a pullback this week. The risk/reward on shorting dollar just doesn’t not look to good to enter at current prices.
I didn’t bother trading on Good Friday due to the really low volume. Unfortunately, the long EUR/USD position I was holding got stopped out and prices consolidated in a range. I had a really good feeling that the dollar pullback on Thursday-Friday was the result of low liquidity and that the dollar will continue further down. I should’ve been more aware of the low volume and played it safe, instead I went a bit more aggressive each time a trade would go against me.
Now that Easter’s over, the market’s liquidity is returning back to normal. If I held my short dollar positions from Thursday, I could’ve had a decent profit, but I didn’t want to take my chances. My outlook on dollar is still short, and hopefully we’ll see some movements again.
Trump ended the market in a surprise attack late afternoon when he claimed the dollar was too strong. The dollar is down about 0.5% since Trump’s comment and is still falling during Asia session. I don’t think the market will challenge Trump’s comment as a bluff and instead act accordingly, which is to sell the dollar before Trump takes actions to depreciate. In my opinion, the dollar is going to continue to fall and safe havens will continue to rally.
Today was one of the better days as my short dollar positions profited from Trump’s comment. Some may call it luck but there was definitely more than enough signs in the charts that dollar was looking for a leg down. This whole week I was selling dollar and today was one of the days luck was on my side.
The dollar is teetering with Trump and his Global issues. There’s tensions between North Korea, Russia, China, Syria, and other countries with unpredictable futures. Investors definitely do not like an unpredictable currency, therefore, it’s not surprising to see the USD/JPY fall hard and gold to gradually increase. For the near future, I definitely see safe havens having their moment of appreciation.
My outlook on dollar isn’t necessarily bearish, but it certainty isn’t bullish with the countries mercurial president. Yellen also stated that rate hikes will be gradual and the future is a bit foggy for now. I was able to get some good scalps on USD/JPY shorts today and I still think it has a lot more room to fall. For now, safe havens all the way.
The dollar is undoubtedly crunching up for some type of bounce, however, the bears are not giving up without a fight. A dollar pullback from here would be nice because the R:R is delicious, however, it still hasn’t budged. I kept throwing in a few dollar long trades against EUR/USD and GBP/USD, but it’s been stuck in a range. GBP/JPY short scalps however has been paying off.
Another simple day of riding the trend. USD/JPY is by far the best and smoothest mover. The toughest part of riding trend is knowing when to pullout. It’s really hard to predict Dollar’s support and it seems like on some pairs, dollar already found some support. I’m still liking USD/JPY shorts but EUR/USD bulls seeem to run out of steam. I may not be surprised to see the dollar open higher on Monday.
The rate hike was raised first time this year by 25 basis point but the dollar bulls were not happy. In fact, there were a lot of profit taking along with selling across the dollar. Although Yellen has stated optimism in the labor market and business sentiment, she still remains cautious. If everything still goes well to plan and the economy continues to gradually grow, it looks like we’ll have 2 more rate hikes this year; a hawkish decision would be 3 rate hikes.
Things were funky before the FOMC statement and I gained a few losing trades by falling into a long dollar trap. Luckily I was able to make some of the losses back and stayed away during FOMC volatility. It looks like the dollar bulls will be quiet for a bit until we can find some support. The strong reaction in any dollar chart, here’s one of USD/JPY.