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Friday, January 15, 2021

Commerce concepts thread – European session 11 January 2021

Every day thread to change concepts and to share your ideas

The greenback is main the cost to start out the brand new week as the newest pullback begins to pose some questions on a possible snap rally within the short-term for the greenback.

WCRS 11-01

Of observe, USD/JPY is contesting its key trendline resistance from the center of final yr @ 104.18 and that’s maintaining issues a bit extra tense to start out the week, particularly with Treasury yields breaking out to the upside.

In the meantime, equities are a bit on the retreat to start out the week following the stable positive factors final week – with US indices ending at a document on Friday.

Going again to the greenback, issues are getting a bit extra attention-grabbing now with the greenback index (DXY) transferring again above 90.00 upon assembly some assist:

DXY 11-01

I’ve talked about earlier than that I am no large fan of the greenback index usually (since it’s largely a mirrored image of EUR/USD) however the Bloomberg greenback index is reflecting related sentiment because it additionally runs into some assist from the 2018 lows:

BBDXY 11-01

Whereas the argument for an even bigger greenback decline continues to be intact, it would not rule out the potential of a short-term correction to start out the yr – particularly when you think about the push decrease within the dollar since November i.e. post-election.

In the end, I’d say that it nonetheless comes right down to the Fed however within the meantime as yields soften up and market positioning is stretched, there may be some consideration for the so-called “consensus commerce of 2021” to ease up a bit as issues get began within the new yr.

Elsewhere, gold can be threatening an extra draw back push because it continues to check its 200-day transferring common (now at round $1,837). That would be the key stage to look at for gold in case the draw back momentum extends this week.

That mentioned, I would be trying to scale in dip buys in gold from right here by way of to the end-November lows; ought to we see issues go additional south for gold that’s.

What are your views in the marketplace proper now? Share your ideas/concepts with the ForexLive neighborhood right here.

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