A1 Trading Company

Ticker tape by TradingView

June 21, 2022

USD Is About To Make A Huge Move

Frank Cabibi

Tomorrow and Thursday will likely be the most volatile days for the USD this week because of the testimony given by Jerome Powell. Here are some things to look out for as well as a couple trade setups that could lead to huge market swings either up or down.

Bullish Case For USD

In order for the USD to be more bullish, investors need to be more fearful of a recession as well as further tightening monetary policy. Because inflation is so high, analysts fear that it may take years before we come back to the Fed's original target of 2%. Powell may make remarks about this in the upcoming testimonies, and it would be very important to listen for this when we trade.

usd
https://www.forexfactory.com/calendar?week=jun12.2022#graph=123024

Powell will also address current policy towards the inflation cap where he will either stay the course or loosen up for expansionary reasons. If he says that the 75 basis points hikes are likely to continue, we may start to see another rise in USD. The original plan was to bring rates up by a quarter of a percent each time, however, this changed to half and then three-quarters of a percent in the most recent hike.

Bearish Case For USD

Should Powell state that in terms of the economy, the US is doing better than they thought, the price of the dollar might fall. Additionally, if Powell says that the economy is in trouble and the Fed wants to loosen policy, we also might see a fall in USD.

usd
US unemployment rate

The US unemployment rate is another thing to look out for as jobless claims come in on Thursday. Higher unemployment usually means bullishness for the dollar. However, now investors might be looking at higher unemployment/higher jobless claims as bearishness for the USD. This is because the worse the US economy is doing, the more likely it is for Powell to take a less hawkish stance toward the dollar and raise rates at a slower and lesser pace.

USD Trade Setups

USD/CHF

usd

This pair on the 1D timeframe has come down to support on a rising trend line. Price also hit the 50% fib level and has been showing considerable rejection from the lows in each of the last three trading sessions. If price bounces from here, we might see the pair go back up to the double top it established in the week before above 1.00000.

GBP/USD

usd

Pound-dollar is barely up today after a weak rally to the upside. A strong falling trend line sits right above price which may serve as a short opportunity on the 1D timeframe. Today's candle is already showing signs of rejection from the highs, so there might be selling pressure in the near future depending on how this candle closes. Should price retrace, it could come down to test the lows of 1.19520s.

EUR/USD

usd

EURUSD inches higher with the stock market today although momentum is not very strong at open. Price is nearing resistance around the 50 DMA with a 1.07600s resistance level right above that. Lagarde plans to hike twice this summer but the US has already hiked 3 times and plans to reach over 4% interest by the end of the year. This gives USD a bullish advantage over the euro.

A1 Edgefinder

Smart Money Tracker
See where big money is flowing with the A1 Edgefinder's smart money tracker! With one click, see where the biggest money flows are entering and exiting through COT data.

10% off code: 'READER'

GET ACCESS NOW

VIP discord

Trade Alerts, Strategies, Chatrooms & more!

10% off code: 'READER'

LEARN MORE
What To Take Away From Powell's Remarks

Today, Fed chairman Jerome Powell spoke on the labor market and inflation. While we don't know what the future holds for the equities and currency market, we can derive certain conclusions from investors' interpretations. Here are some powerful takeaways from Powell's remarks this afternoon. Key takeaways Market Impact This caused the dollar and equities to […]

Read More
What To Expect From Today's FOMC

Today at 2:00 pm EST, the Fed will announce their latest interest rate decision. Estimates suggest a smaller hike of 25 basis points this time around. Here are some things to consider before the FOMC decision later today: The Fed has struggled to tighten their grip on inflation without causing too much disturbance in the […]

Read More
The Art of Not Trading

With the holiday season lingering on and a new year on the cusp of arrival, traders may glance at the calendar and notice there is not much economic news to anticipate on Friday to cap off a light week. In situations like these where there can be lulls in bullish and bearish momentum due to […]

Read More
DISCLAIMER: All comments made by TraderNick’s Forex Group, LLC are for educational and informational purposes only. All comments should not be construed as investment advice regarding the purchase or sale of any securities or financial instrument of any kind. Please consult with your financial adviser before making an investment decision regarding any securities or financial instruments mentioned by TraderNick’s Forex Group, LLC. TraderNick’s Forex Group, LLC assumes no responsibility for your trading and investment results. All information on any of the platforms utilized by TraderNick’s Forex Group, LLC was obtained from sources believed to be reliable, but we do not warrant its completeness or accuracy, or warrant any results from the use of the information. TraderNick’s Forex Group, LLC, its employees, representatives, and affiliated individuals may have a position or effect transactions in the securities and financial instruments herein and or otherwise employ trading strategies that may be consistent or inconsistent with the provided strategies. Trading of any type involves very high risk and may not be suitable for all investors. TraderNick’s Forex Group, LLC, its subsidiaries and all affiliated individuals assume no responsibility for your trading and investment result. Read our full disclaimer here
Home
Edgefinder
VIP
Menu
homesmartphonelaptopmenu linkedin facebook pinterest youtube rss twitter instagram facebook-blank rss-blank linkedin-blank pinterest youtube twitter instagram