Amidst global uncertainty in stock markets and commodities, investors might stop trying to guess which direction to trade. Instead, they might try to just stick to the safe havens like the dollar. That being said, here are some USD pairs to watch and potentially trade for next week as we see tighter monetary policy and mixed indices.
Fundamentally, we can put a few things into perspective. One, is that a driving factor towards global uncertainty is the Russian invasion on Ukraine. If peace talks remain stalled, we will have a hard time picking direction on the indices and risk-on plays.
Another factor is US's miss in NFP today. That's been a major driver in the market and the USD. Jobless claims also saw a rise this week, so temporary bearishness on stocks and bullishness on USD looks probable.
COT is also playing a big role in institutional sentiment as big money is upping their stakes in this safe haven currency. Long contracts have increased by 3.7 million in the last week while shorts have only risen by 2.5 million.
USD is up after a mixed jobs report where the US missed on NFP but beat unemployment rate. USDCHF bounced up from the 200 DMA which would have been a very clean entry on the 1D, and price is up against resistance in the .92700s.
GU closely follows the performance of the US stock market. The pair is struggling to break above this resistance level as US equities struggle for the third day in a row. If GU can't break above this level on the 1D, we could probably see further downside towards the low of 1.30031.
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