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
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.
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.