Strong USD selling on Trump comments

13 April, 2017

The US dollar has come under some strong selling pressure today after recent comments from President Trump were very much in the bears favour. While previously campaigning on a platform of change in the last few hours he has a done a number of U-turns on economic policy, including: being open to extended Yellen in the FED, and stating that low interest rates are good for the economy and he wouldn't mind them remaining low for some time. On top of this he has backed down his aggressive rhetoric against China being a currency manipulator. But the main point has been very clear, and that is Trump does not want a strong US dollar - which make a lot of sense when you consider his push to boost the US economy and drive home manufacturing and job creation.

For the global markets there are always going to be strong winners and the EURUSD has been one today, and may continue to be so if Trump continues the way he does. With the European Central Bank looking to wrap it's stimulus to the economy and the US economy booming it could have nice flow on effects for the Euro. Throw in the addition of Trump talking down the USD and we could see the EURUSD continue its bullish wave pattern as of late, while also being supported by bullish trend line. Right now the EURUSD is testing resistance at 1.0676 with the potential to extend higher and push on 1.0767 and 1.0869. Expectations for a third wave are generally the strongest, but it would require the selling in the USD to continue and for the EURUSD to ignore the 20 day moving average as it shifts higher.

Gold has also been another big winner as of late with Trump and the weakness of the USD. While the market traditionally treats it as a hedge against inflation, in this case that is most certainly not the case. Thus far the market has been treating it as a store of value in the event of a calamity, as many traders are worried over Trump and his words over North Korea and Russia. Both countries which can stir up global unrest and could lead to issues further down the line. For now though the USD weakness has been a boom for the precious metal as for the second straight day we saw strong extensions for gold.

It looks very much the case that gold will attempt to test 1290 on the charts, but I am unsure if it will have the legs to push through the bearish trend line that has been in play since July 2016. A failure at this level would send gold downwards, with an extension to support at 1263 being a likely scenario. One this is acutely clear though for gold, and that is the Trump effect can lead to big swings which ignore technical's but also help drive volatility which in turn does help traders.


Source link  
Earnings vs. Interest Rates: who wins?

Global equity markets failed to resume any kind of strong rebound following Tuesday's surge. Asian equity indices are deep in the red today...

Dollar lifted by hawkish Fed minutes

Dollar bulls were back in action on Wednesday evening after minutes from the Federal Reserve's September meeting reinforced expectations...

Yuan firms on Dollar weakness

Global investors will likely remain on high alert throughout the end of the week to see if the largest market sell-off since early 2018 will...


EM currency weakness refuses to go away

Tuesday has seen stability in Chinese markets following a very nervous beginning to the new trading week yesterday. Signs of China market stability...

Yuan eases on risk-off sentiment

Financial markets have entered the new trading week on negative footing as a mixture of different market themes weigh on investor sentiment...

Risk assets under pressure from rates

Chinese equities took a big hit after traders returned from a week-long holiday. Efforts by the People's Bank of China to free more than $100 billion...


U.S. Treasury Yields boost the greenback

The U.S. Treasury selloff on Wednesday was the biggest story in the financial markets. This time it wasn't only the rate-sensitive two-year yields that marched higher...

NAFTA deal fails to lift global risk appetite

Global investors remained defensive on Tuesday despite the U.S. and Canada agreeing to a new trade deal ending months of uncertainty...

Dollar steady after Fed raises rates

In a widely expected move, the Federal Reserve has raised its key interest rate by 25 basis points for the third time this year. The central bank...


In the past 24 hours Bitcoin has lost -0.43% and reached $6484.31862717. Open your trading account with the best cryptocurrency brokers on special terms today.

In the past 7 days the EUR/USD pair has gained 0.6352% and is now at $1.1587. Start trading and making money on Forex today.

In the past 7 days Ethereum has lost -1.88% and is now at $204.528351906. Have the most popular cryptocurrencies compared online 24/7.


Top Brokers offering Forex Market Analysis



Forex Currencies Forecasts



Top 10 Forex Brokers 2018

# Broker Review
1easyMarketseasyMarkets91%
2FXTMFXTM88%
3HYCMHYCM87%
4Alfa-ForexAlfa-Forex86%
5FxProFxPro85%
6FIBO GroupFIBO Group84%
7OctaFXOctaFX83%
8HotForexHotForex82%
9FXCMFXCM80%
10AvaTradeAvaTrade77%
  


Share: