Today's news around consumer sentiment ended up another disappointment to economic data. As a result price action has suggested a couple shifts in direction for certain assets. There are a couple currency pairs that are ready to take off according to these metrics.
DXY
The dollar has been strong all of February, but because of market volatility, it has been hard to realize that. DXY demand grew after the FOMC rate decision and meeting minutes three weeks later. A hawkish Fed promised to stay loyal to the fight against inflation. Today's consumer sentiment data showed a decline in economic confidence. Thus, causing a spike in gold and USD.
What technicals say about DXY is that there may be a buying opportunity. On the 4H timeframe, price came down to the 50 SMA before closing back inside the rising trend line. The rejection from the lows tells us that the buyers are still overwhelming the sellers. Price has made some healthy retracements but is up over 3% overall.
CHF/JPY
The Yen is starting to pick up some strength after taking a beating for the past month. BOJ governor Ueda gave some insight on monetary policy that was good for the currency on Sunday. For the first time in a while, the EdgeFinder is starting to favor the Yen more which could be an indication of a momentum shift.
Price came up to touch a long term falling trend line on the 1D timeframe and was met with hard rejection. Today's candle rejected the highs and suggest some harsh selling pressure. If we get to see a close with this inverted hammer paired with the rejection off the trend line, it may suggest that the Yen will fly against the Swiss Franc.
NZD/CAD
Price shows good rejection from the lows on the 1D timeframe after coming to a multi-level of support. CAD gdp came in lower than expected and lower than last month's gdp growth, so the kiwi is starting to look stronger again.
There may be some retracement after this tremendous move, but the pair looks strong overall. Price could end up testing resistance around the 0.86000s again.
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 […]
