The U.S. Dollar shot to 2003 highs as investors continue to bet on inflation taking off followed by an interest rate hike.
Starting off with a few COT report positions, non-commercial longs increased across almost all pairs. The Great Britain Pound non-commercial short positions reduced by 9,532 contracts, Australian Dollar longs rose by 410 contracts, Canadian Dollar shorts dropped 2,713 contracts, and finally Euro shorts dropped 10,132 contracts.
Nevertheless, the Euro Zone and Asian currencies are at risk with Trump’s policy plans to essentially re-enact trade barriers and bring manufacturing back into U.S. borders in order to increase employment and market U.S. goods competitively.
Technical setups signal early sign of Dollar exhaustion especially across Yen pairs. Starting with USDJPY, this pair is hitting end of May highs at the 110.9~ level signalling a possible reversal level.
Over on the 15 minute time-frame, I have narrowed down two more zones of possible supply and demand zones. Once price retraces back near the 111.00 whole number, I believe this is another optimized short entry.
Similarly, GBPUSD is testing a demand zone of its own at the 1.232~ price zone. Volatility should pick up as we approach the London session open and bid orders should flow in given the heavy sell-off the week prior. This is another pair currently on my watchlist for the week ahead.
Few more trades I’m watching for the week ahead:
Stay tuned for more chart updates.