USD continues to rally on strong fundamentals

Forex Daily Market Insight

Today’s focus turns to AUD & USD data

Strong fundamentals

The USD Index rallied on strong fundamentals to a four-month high on Monday as US 10-year Treasury yield’s climbed towards the psychologically important 3% level.

The 10-year yield hit its highest in over four years at 2.998%, driven by worries about the growing supply of government debt and accelerating inflation as oil and commodity prices climb. But although traders got close, the 3% barrier continued to hold late into Monday’s session.

The strong dollar and strong fundamentals also reflected an improved outlook on trade. On Saturday, U.S. Treasury Secretary Steven Mnuchin said on he may travel to China, a move that could ease tensions between the world’s two largest economies. The de-escalation of trade tensions favors the dollar in the short run & that has definitely played a part in the recent USD rally. 

The major currency pairs are correlating perfectly with the strong USD sentiment, so now is the right time to be trading.

I took some good cash out of EURUSD yesterday and I’ve reloaded the order to get short again. My USDCHF trade got pinged on the low which was unfortunate, whilst my USD Index trade is still in play and about 30 odd points in the cash.

So basically today I’m looking for more of the same. But I will not chase the markets. I’ll be waiting for retracements on most pairs whilst today’s Aussie and US economic data provides the potential for live trades at market.

#TradeWithTheMarket – Not Against it!

Check our Next Best Trades Watchlist for full details as to which specific pairs we are focusing on.

Asian Session

The AUD will take center stage today with Australian CPI scheduled. This data is released Quarterly so it generally has a much higher impact than the usual monthly data.

The current trend is down for the AUDUSD so I’m thinking a number around 0.3% or lower would be the perfect ingredient for a move towards 0.7500.

If the data comes in strong then we may see it retrace back towards 0.7650-60, but in all honesty, I’m a seller whether this data is strong or weak.

Concentrate on the AUDUSD & AUD Crosses for the best trades.

European Session

Keep an eye on the German Ifo numbers today. The EURUSD data has been coming in pretty close to expectations and that hasn’t stopped the EURUSD from dropping 150 pips the last few days.

With the ECB meeting approaching this data could come into play, particularly if it’s weak, which would mean it’s running with current momentum. I’m currently looking for a rally in EURUSD to get short but this data may give us a chance to get short ‘at market’.

North American Session

Keep a close eye on the US data from here……I know we do usually but now the USD is charging with clear direction, it’s even more important.

If the data comes in strong, then the rally should continue aggressively.

If it’s slightly weaker then expected, then we may see a few retracements to reload!

All Major currency pairs are in play!

We’ve got good trading conditions, so now’s not the time to shy away from the markets!

Technical Set Up – What’s Happening with the Majors

The USD is in total control and charging higher against all pairs. These are great trading conditions!

strong fundamentalsCheck our Daily Analysis for detailed analysis of the Major currency pairs.

Today’s Fundamental Drivers

strong fundamentals

Plan the Trade, Trade the Plan!

The idea of our “Market Insight” is to give you some guidance with your daily preparation.

Your Daily Analysis needs to become habitual – For full guidance on our daily routine click here.

Make sure you don’t waste unnecessary time in front of the screens.

Remember you need to be fresh, confident and ready to trade and by sitting aimlessly in front of your screens you will become stale and uncertain.

The key to your success: Isolate the opportunities that work for you and focus on them.

Don’t worry about things that you can’t make…..chasing them will only cause problems (tiredness & irrational behavior will take over).

Tune up your charts & get ready to trade…..

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