Euro / U.S. DollarShort
EUR/USD and other asset classes. Is the trend still our friend?
Hello traders.
We may be approaching an important infection point for the USD.
I do not necessarily trade any of these assets but I do keep a close eye on FX, gold, stocks, bonds and crypto to gain a better understanding of the current trend and risk appetite.
So, where to from here after Chair Powell confirmed that rate cuts are coming?
I was slightly surprised at the price action during his speech since a 25 base point cut has been baked into all markets for some time now. I believe that it was simply a case of pushing all the asset classes I am looking at to the maximum chart resistance to position for a 50 point cut.
I do not believe that an initial cut will exceed 25 base points. Unless there is a catastrophic jobs report on 9/6/24.
In the meanwhile both USD and Euro will face a test on 8/30/2024 with CPI prints on the same day. it is also preceded by US GDP and some first and second tier German data.
A lot can happen between now and the FOMC rate decision on 9/18/24, so I will definitely tread lightly for the next 3 weeks. however, the technical levels speak for themselves and could present an opportunity to short EUR/USD and NZD/USD
I am refraining from USD/JPY for now since there is too much political uncertainty in Japan with more rate hikes a certainty.
Please keep in mind that even with USD rate cuts coming, the RBA has indicated that they do not anticipate any rate cuts in the near future. As for the other majors, cuts have already happened and promised to happen soon. That will still leave the USD with a significant spread advantage.
Good luck all. I include the link to the other asset classes I am following.
https://www.tradingview.com/chart/xSM03ID7/
We may be approaching an important infection point for the USD.
I do not necessarily trade any of these assets but I do keep a close eye on FX, gold, stocks, bonds and crypto to gain a better understanding of the current trend and risk appetite.
So, where to from here after Chair Powell confirmed that rate cuts are coming?
I was slightly surprised at the price action during his speech since a 25 base point cut has been baked into all markets for some time now. I believe that it was simply a case of pushing all the asset classes I am looking at to the maximum chart resistance to position for a 50 point cut.
I do not believe that an initial cut will exceed 25 base points. Unless there is a catastrophic jobs report on 9/6/24.
In the meanwhile both USD and Euro will face a test on 8/30/2024 with CPI prints on the same day. it is also preceded by US GDP and some first and second tier German data.
A lot can happen between now and the FOMC rate decision on 9/18/24, so I will definitely tread lightly for the next 3 weeks. however, the technical levels speak for themselves and could present an opportunity to short EUR/USD and NZD/USD
I am refraining from USD/JPY for now since there is too much political uncertainty in Japan with more rate hikes a certainty.
Please keep in mind that even with USD rate cuts coming, the RBA has indicated that they do not anticipate any rate cuts in the near future. As for the other majors, cuts have already happened and promised to happen soon. That will still leave the USD with a significant spread advantage.
Good luck all. I include the link to the other asset classes I am following.
https://www.tradingview.com/chart/xSM03ID7/
Note
So far, so good. I have lowered the stop on my short to 1.1155. I am targeting 1.1081-1.1095 area to take profit. It that level holds, I would consider a long with a very tight stop in anticipation of the CPI print for USD and Euro Zone on Friday.
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