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  
USD and Oil in focus

The USD lifted again against all majors, as US retail sales m/m came in strong at 0.5%, in line with expectations. At the same time the previous month was...

Investors in cautious mode

Global equity and foreign exchange markets were relatively quiet on Wednesday as the U.S. financial markets were closed in observance of Independence Day...

Recession fears rise as trade war heats up

It has been an interesting first half for 2018. Economic fundamentals and politics took center stage as both fought for market influence.

Relentless rout for emerging currencies

While the speed of selling has slowed down compared to the early part of the week, emerging market currencies have continued to show...

Yuan weakness accelerates

Concerns over the possibility of an upcoming trade war are expected to remain front and center of investor focus once again today. Although the trading atmosphere is not quite as negative...

Lira jumps higher on Erdogan victory

All eyes are on the Turkish Lira this morning with the currency rallying sharply in early trade today, following the news that Turkish President Recep Tayyip Erdogan...

Trade war fears ease, but for how long

Global stocks have bounced back to life after China's central bank calmed markets by urging investors to stay calm and rational. While this move by...

Oil slips further ahead of OPEC meeting

Oil markets have suffered another blow today as US oil inventories showed an increase of 2.07M barrels (-2.1M exp), while at the same time US gasoline...

Trade war fears to dominate market

After imposing tariffs on steel and aluminum imports on its closest allies, the U.S. will be facing enormous criticism at the G7 summit on Friday in Quebec...

In the past 24 hours Bitcoin has gained 0.69% and reached $7378.2. Open your trading account with the best cryptocurrency brokers on special terms today.

In the past 7 days the EUR/USD pair has lost -0.1166% and is now at $1.1665. Start trading and making money on Forex today.

In the past 7 days Ethereum has gained 8.65% and is now at $480.033. 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
4FIBO GroupFIBO Group79%