U.S. Dollar sells off on protectionism concerns and trade setups to take

Economic concerns still looms as reflect with the quick rally and selloff of the U.S. Dollar.

Donald Trump’s presidency continues to highlight taking a protectionist stance causing greater market volatility indicated by the Dollar’s performance over the past few days.

Some policies under review right now are as below:

  • Continued support for the Keystone XL and Dakota Access pipelines aimed to expand energy infrastructure
  • Immigration wise temporary suspension of visas for citizens of Syria and other Middle Eastern and African countries
  • Persuasion for American automakers to keep manufacturing within borders
  • Re-negotiation of the North America Free Trade Agreement with Mexico considering pulling out if terms do not benefit them

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After hitting the 103~ highs, the Dollar Index has been making its descent potentially crossing below the 100 mark. U.S. Dollar pairs continue to test historical supply zones as downside pressure poses another potential sell-off.

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Utilizing the USDJPY and EURJPY pairs to establish a bearish dollar, current trade in progress involves shorting the break-lower on USDCAD. The supply zones on USDJPY and EURJPY have already held with offers streaming in. Current expectation is for USDCAD to continue selling off beyond the break-out below level with a tight stop due to this pair being heavily oversold already.

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