EUR/USD
The Euro has fallen pretty significantly against the US dollar. Nothing drastic, but it is a continuation of what we’ve seen. Despite the fact that I keep hearing stories about the US dollar no longer being the world’s reserve currency and that it is going to zero. The reality is that after the FOMC press conference, the dollar for the most part, has done nothing but strengthened. I understand it goes against the narratives, but this is a perfect example of don’t pay attention to what the markets should do or what you’re hearing from random people. Pay attention to what price is doing. And price is telling you right now, the Euro looks a little sick. We’ve broken through a couple of trend lines along the way. And now it would not surprise me at all to see this pair eventually work its way down to the 1.14 level.
GBP/USD
The British pound has given back some of the gains, but in this case, I think the British pounds a little bit healthier against the U.S. dollar, which makes sense. It was all last year as well. The interest rate differential isn’t as much, and we are sitting just above the 200 day EMA. While I don’t want to buy this pair, I do want to keep an eye on it because if it starts to fall, that tells me the dollar is probably going to strengthen against most other currencies as well. It’s been such a stalwart of resistance against the green bank. think if it starts to give up price now, that would be a bad sign for everybody else. If it does rally, I’d suspect somewhere around 1.34 or the 50 day EMA just above to offer some resistance that probably causes some sellers to come back into the market.
USD/CHF
The US dollar has rallied quite nicely against the Swiss franc. I think this is a pair that could be early days now but could be in the process of trying to turn things around and bottom. I think the real key is going to be somewhere around 0.8150. If we can ever overtake that about a hundred pips from here. Then I think the U S dollar is really going to take off. I do like the idea of buying dips in this market, mainly because it’s positive swap and it’s a slow mover. It’s a good way to play the US dollar without a lot of concerns about huge momentous moves 99 % of the time. Typically speaking, the Swiss franc moves a little slower than some of the others. So, it’s a nice way to pad your account through swaps. I don’t know that we break out, but it certainly looks like we don’t want to break down and that in and of itself can be a signal.
