It is likely we see a USD surge in the near future as we get closer to the Fed meeting in March. Bond yields hit yearly highs this morning as the dollar begins to look stronger. A prominent "risk-off" attitude in the markets is showing now, and it looks like investors will be getting out of stocks and gold in the anticipation of higher interest-yielding bonds. Goldman Sachs (GS) reported a miss in earnings sending the company's stock down by 8%.
Because investors will be pricing in these moves ahead of time, the dollar will probably continue to gain up until the March meeting. The heat map indicates increased volatility on all USD pairs as we expect rocky trading sessions in the meantime with a bullish favor towards the dollar. If you are invested in the stock market, I would not say to sell out of your positions, rather make sure that you have enough cash on the side and look to pad your accounts with potential USD longs.
So, with risk-off sentiment, higher rate expectations, and a rough start to stock earnings, USD looks like the better play this week at least as we inch closer to the Fed decision day.
These pairs look especially strong as we expect little to no monetary policy for the yen and a weaker franc this week after it missed PPI expectations.
GDP numbers came in lower than expected in the US, marking the third straight drop in economic output. This is usually good news for the stock market indices and gold, however, bond yields continue to hold up above 5.1%. Here are some potential trade setups for both dollar and index longs depending on how the […]
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Last Friday's report showed a significant change in global market sentiment from smart money. What COT signaled has turned ultra-risk-off for traders who have been hoping for Fed fears to subside. This news could spark up worries about higher interest rates for the long term. EdgeFinder Analysis GBPUSD is now a -12 on the EdgeFinder […]
