Case To Sell USD On Rallies Warranted
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Case To Sell USD On Rallies Warranted

Authored by Ivan Delgado

Ivan Delgado is a decade-long Forex Trader. Feel free to follow Ivan on Youtube. Join thousands of traders who follow Ivan's insights to increase their profitability rate by learning the ins and outs of how to read and trade financial markets. Ivan has you covered with in-depth technical market analysis to help you turn the corner.

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Scan Of The Markets
Recent Economic Indicators
Insights Into Market Flows (Video)
Educational Material

Scan Of The Markets

The indices show the performance of a particular currency vs G8 FX. A video on how to interpret these indices can be found in the Global Prime’s Research section.

On the back of the announcement of yet another monster-size lending program last week, the new Fed Put is working like a charm for the interest of those looking to keep shorting the US Dollar.

The Central Bank also issued a statement that as part of the unfolding QE measures, it will include credit – directly or ETFs -, even sub-investment grade – high yield or sub-investment grade paper.

It’s been a one-way street for the US Dollar since the technical inflection point back on April 7th. Clients following the daily video analysis I make available every day can attest the directional calls have been accurate and it does not look like the tide will turn just yet.

The outlook for the USD, therefore, remains very fragile heading into Tuesday, with EUR/USD at a discount through 1.09, GBP/USD with a void of 200+ pips to exploit, AUD/USD setting its sights on 0.6430 if not 0.6470, while USD/JPY appears to be en-route to 107.00. All the details about the aforementioned calls can be found in today’s video.

But no market is thriving more than gold as it breaks its previous trend high beyond $1,700.00 at a time when the Fed keeps expanding its balance sheet at lighting-speed. And guess what? Mnuchin said “we think there is a likelihood we will need more money.”

When it comes to Oil, despite OPEC producers and allies agreed to a record deal that will slash global output by about 10% – largest cut in oil production ever – the technical stance by is hardly encouraging. The dominant flows suggest a retest of the $20.00 handle may be in store.

This evaporation of willing USD buyers comes on the heels of a bullish phase in equities, supported not only by the new Fed Put, but also by the ‘gamble’-type move by Trump to reopen certain parts of the economy, noting in a defying tweet that it’s “my decision when to open up the economy, not that of state governors…”

The position by Trump’s right-hand man in the fight against COVID-19, Dr. Anthony Fauci said Sunday that public health officials could consider measures to reopen the country next month, depending on the status of the outbreak in different states and cities, but warning that “a rebound in outbreaks later this year” is a risk to consider.

In Europe, attention has been on the rescue fund, finally approved, in spite of the resistance by the Northern block. According to the Team at NAB, “it triggered a political storm as a result of Italian FinMin Gualtieri willingness to sign up to the EUR500bn  albeit without the tough macro conditions demanded by the Netherlands.”

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Recent Economic Indicators & Events Ahead

Source: Forexfactory

If interested in the best ‘free of charge’ News Indicator that displays data on past and future news in the Forex market via MT4, check this YouTube video I produced. The indicator allows you to save time, avoid mistakes. It’s spot on!

Insights Into Market Flows

This analysis complements one’s view by accounting for multi timeframe biases. Ultimately, it is the traders’ call, via a set of entries thoroughly backtested, to enter a position. This analysis is mainly intended as a way to educate traders in upping their analytical skills.

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Important Footnotes

MARKET STRUCTURES

Markets evolve in cycles followed by a period of distribution and/or accumulation. To understand the principles applied in the assessment of market structures, refer to the tutorial How To Read Market Structures In Forex.

SMART MONEY TRACKER 

In order to assess the market momentum of a particular asset, I’ve promoted for years the idea of using what I call the smart money tracker. The settings and the indicator can be obtained via our Discord room, where traders from all walks of life interact frequently. In this video I lay out the elements I look into to call trend directions.

SUPPORT & RESISTANCE

Unlike levels of dynamic support or resistance or more subjective measurements such as fibonacci retracements, pivot points, trendlines, or other forms of reactive areas, horizontal areas of support and resistance are universal concepts used by the majority of market participants. It, therefore, makes the areas the most widely followed. The Ultimate Guide To Identify Areas Of High Interest.

FUNDAMENTALS

It’s important to highlight that the daily market outlook provided in this report is subject to the impact of the fundamental news. Any unexpected news may cause the price to behave erratically in the short term. Monitor the event risks via Forexfactory.com & refer to Fundamentals vs Technicals In Forex.

PROJECTION TARGETS

The usefulness of the 100% projection resides in the symmetry and harmonic relationships of market cycles. By drawing a 100% projection, you can anticipate the area in the chart where some type of pause and potential reversals in price is likely to occur, due to 1. The side in control of the cycle takes profits 2. Counter-trend positions are added by contrarian players 3. These are price points where limit orders are set by market-makers. You can find out more by reading the tutorial on The Magical 100% Fibonacci Projection