Dollar stalls as rate hike 90% priced in for March

My two technical setup trades on an AUDUSD short and USDJPY long held up quite nicely through to Friday’s close.

My AUDUSD short trade was a success as this pair experienced an accelerated sell-off on Thursday and closing into Friday.

screenshot-at-mar-06-00-45-47
AUDUSD 4-Hour

Given no significant Australian economic releases last week, this pair was sent lower on prospects of a March rate hike as observed a similar sell-off in gold prices. Rising rates increases the opportunity costs of holding non-yielding bullion.

Speaking of the rate hike, the March rate hike of 0.25% at the March 14 to 15 meeting is about 90% priced in with another expected later in September as according to Reuters. The U.S. Dollar is expected to rally further if the Feds provide positive economic forecasts for the rest of the year and next. Nevertheless, the upside of the March rate hike remains limited.

On a final note, the commitment of trader’s report highlights cutback on non-U.S. Dollar bearish positions:

screenshot-at-mar-06-01-08-52
*Provided by ICMarkets
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