Dollar Bulls – Sold The News
The USD is on track for a weekly loss against its major counterparts as the USD Index hit its lowest level since February 9th.
The U.S. Dollar rally build up to the highly-anticipated interest rate hike from the Federal Open Market Committee on Wednesday was met with a Greenback sell-off when the actual announcement hit. This reaffirms our post from a few weeks ago that so often the major players in the Forex market will react in anticipation of a market event rather than in response to the actual event that occurred as anticipated.
Our ForexSignal Trading Team sent a Forex signal to our clients all over the world to sell the USD and buy the CHF on Monday prior to the Fed announcement. As we got close to the time of the Fed meeting minutes, we cautioned our clients that as an option, they may want to exit the trade with a small profit in the wake of the impending volatility. Those who closed their trades then took a small profit, and those who kept the trade opened benefited as the USDCHF hit all 3 of our Take/Profit targets.
Dollar Rally Pause, Not Reversal
The recent series of strong data in the USA along with the recent rate hike and near-future anticipated rate increases in 2017 is likely enough impetus to keep the USD trending strong. We expect to see the strong dollar trend to continue, especially if the trend of strong data keeps the likelihood of rate increases on track. So, while we may see some near term market correction as the USD bulls exit their positions, we don’t expect a major reversal of the current trend unless we are hit with some heavy negative data in the weeks ahead.
Support and Resistance Levels
Here are the support and resistance levels for trading on Monday March 20th:
EUR/USD
High: 1.0782
Low: 1.0727
USD/JPY
High: 113.48
Low: 112.55
GBP/USD
High: 1.2404
Low: 1.2323
AUD/USD
High: 0.7717
Low: 0.7662
GBPJ/PY
High: 140.45
Low: 139.15
USD/CHF
High: 0.9984
Low: 0.9941
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