The dollar liquidation continues without firms arguments to see a correction.
An already touched greenback did not favor the statements from the US Treasury Secretary Steven Mnuchin, confirming that a weak dollar is good for the American economy. This has been the edge that was missing the greenback to further deepen the freefall that accumulates about 4% so far this year, surprising even the most bearish, in a scenario where the currencies have decoupled from the monetary policies and the political factors are now influencing moves in currency markets.
The 1.2350 break in the EURUSD has accelerated the movement in an exaggerated way, trading this morning above 1.2450, levels not seen for three years, also highlight the spectacular rise of the GBPUSD that in almost 10 sessions has appreciated close to 6.5%
We think that these exaggerated movements may bring be a good oporunity to accumulate USD longs waiting to see a correction in the next sessions.
Today all eyes in the European Central Bank meeting. No significant change is expected in the current monetary policy and a direct message to the European currency, wich appreciation further complicates the achievement ot the inflation target. We will see if Mario Draghi is able to stop this upward movement that responds more to a fall in the USD than to an appreciation of the EUR.
We also have today the first meeting of the year of the Central Bank of Norway where no changes are expected and which keeps the tone of the December meeting.
In terms of data, the German IFO and the new housing data in the USA. the macro references to watch.
Watching carefully the USDCNH Vs EURUSD, highly correlated
A weekly close in USDJPY below the Ichimoku cloud (109.10) would be a bearish signal
Stop loss in long USDCAD position at 1.2350 opened at 1.2450
Note: This analysis is a personal opinion based on my experience, not a professional signal service. For trading, you must base your decisions on your own criteria
