USD Weakness: Steady As She Goes…
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USD Weakness: Steady As She Goes…

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.

Equities keep roaring ahead, with the calls made to keep buying the S&P 500 on weakness coming to fruition. However, the tech-centric Nasdaq has been the superstar with an impressive 4%+ run.

The USD vulnerabilities keep flaring up left and right as the Goldilocks scenario for sellers stays the course, that is, improved risk sentiment combined with an insane amount of USD in circulation courtesy of the unprecedented Fed policies to stem the economic fallout.

To understand how rich we’ve come to trade in such a short period of time as the S&P 500 recovers past its 50% covid19-led retracement, one must be in tune with the current dynamics at play. The Fed has gone above and beyond to become the ultimate buyer of credit, ETFs, you name it… while talk of easing containment measures in the US and Europe gain momentum.

President Trump is prepping an announcement to the nation in coming days that would lay the ground for his grand plan to gradually re-open the economy. In parallel, as the team at NAB notes, “10-states that account for nearly 38% of the economy have also began working on their own separate resumption plans.” In Europe, signs of relaxation in the lockdown were also seen…

Trump’s May 1 target for restarting the economy is “overly optimistic,” his top infectious disease adviser (Anthony Fauci, head of the National Institute of Allergy and Infectious Diseases) said on Tuesday, according to Reuters. “We have to have something in place that is efficient and that we can rely on, and we’re not there yet,” Fauci added.

As I explain in today’s video analysis, the bullish run in equities, taking the S&P 500 as our reference, looks overextended, hence I wouldn’t be surprised that we go through a temporary reprieve. Oil looks quite tricky as well since the latest meltdown has taken us all the way down to the bearish target of 20.00. Gold remains on fire with a new macro target of $1,950.00.

As per the Forex space, the EUR/USD bull run continues to be justified by the aggregated sell-side flows in the USD and 1.10 looks like is just a matter of hours. GBP/USD looks like it has further upside potential until 1.27+ is reached after a major structure breakout earlier this week. USD/JPY is teetering with a breakout of 107.00 after sellers kept re-emerging. AUD/USD remains a buy on dips with the caveat of being mindful where we are at (weekly resistance).

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