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*Good morning/afternoon everyone!*
The U.S. dollar is trading lower against all of the major, led by the decline in U.S. yields. This sell-off took USD/JPY firmly below 113 and the EUR/USD well above 1.18. 10 year Treasury yields are down more than 3bp this morning but we see similar declines in UK and German yields which makes the yen crosses the biggest losers. The deeply oversold New Zealand dollar is the biggest beneficiary of US dollar weakness but the rally is losing steam at the 20-day SMA. The Canadian dollar is steady ahead of the NAFTA talks while the Australian dollar finds itself underperforming all of the majors following softer wage growth. Sterling is also on the back foot with wage growth slowing – this weakness should exacerbate the GBP crosses. We have US retail sales, consumer prices and the Empire State manufacturing releases – 3 extremely important reports for the U.S. dollar that could either reverse the slide or extend the losses easily.
*The MAIN THEMES I see today are*
-USD, -GBP, -NZD, -AUD, -CAD
+EUR, +CHF, +JPY
*Today’s Initial Trades*
1. Sell NZDJPY at market now 77.89, Stop at 78.17, Target 77.61
2. Sell CADCHF at market now .7741, Stop .7769, Target .7713
3. Place Order to Buy EURGBP at .8995, Stop at .8867, Target .9023
Close ALL open day trades by 10:20AM NY / 15:20 GMT