Fundamental predictions are mostly in favor to continue. January is traditionally a slower month in U.S. The market played out the positive expectations of the tax reform and most of the attention will be focused to new Fed Chairman and his words and actions. USD will have a strong relation to US Treasuries. So I expect further weakness in USD in January.
The prices of commodities grow on demand acceleration. Worldwide economy is recovering and some economist predict 2018 to be one of the fastest years in that scope. All of the latest data from China, one of the leaders in metals imports, is on a strong pace. However, North Korean conflict could become one of the challenges not only for the region, but also for the whole world. But so far it’s silent.
Technical picture is telling me that we’re approaching important long term support levels of USDCAD and resistance levels of AUDUSD. You may find some charts below.
Assuming all, I would recommend those traders who still hold shorts of USDCAD and longs of AUDUSD to take profit and shift to wait-and-see mode. It’s very important to observe how commodity currencies will behave in these ranges. Most probably, we’ll see a pullback, which has to be considered as entering opportunity.
One more interesting currency to watch is japanese yen in relation with commodity currencies. But this will be a separate topic to discuss, so stay tuned for updates.
No comments:
Post a Comment