Andrew Lockwood
The City Traders
The continuation of the flattening US yield curve will weigh heavily on the USD in the coming days. Soggy GDP data, increasing virus cases, and the absence of a Senate approval to pass an extension of the emergency jobless will do no favors for the greenback. Furthermore, Fed Powell has confirmed, yet again, they will "do what it takes" to get the economy moving again. Rates increases in the medium to long term are a pipe dream.
When trading trends we like to buy the stronger currencies and sell the weaker. As the chart below shows the USD (green line) is by far the weakest currency. The JPY (brown line) shows a currency gaining momentum confirming the bias to sell this USDJPY. A break of structural support at the 106 handle confirms the path of least resistance is lower. 103 50 is the next meaning full support but we see a push even lower to 102.50 zone. Fading rallies with stops above 106.00.
The information provided in these commentaries is for education purposes only and should not be confused with investment advice. Trading foreign exchange or CFD’s on margin carries a high level of risk and might not be suitable for all investors. Before deciding to invest in foreign exchange or CFD’s you should carefully consider your trading objectives, level of experience and risk appetite . The possibility exists that you could sustain a loss of some or all of your initial investment.
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