So here's my take on some technical and fundamental analysis of the dollar. As you can see from the chart, it is now at the 50% retracement of it's upmove from May 2014. I suspect they will push it lower to retest the 61.8% fib retracement at around 88.50 area. It may take maybe another 2 months (Oct/Nov 2017). On the fundamental level, those two months are important because the FED have talked about balance sheet reduction starting in those time period. What does this mean? It means that they will reduce drastically the amount of treasuries in their portfolio which means treasuries will fall and effectively raising the 10 year yield which will in turn raise interest rates. (When the FED sells its treasuries, this will drain dollars out of the market - in effect will raise the price of the dollar because supply will be less) At that time we could see the dollar bounce back and equities (stocks) and other perceived risky assets come under selling pressure (at least in the US). In the chart below of the EURUSD, you can also see it is approaching its 50% retracement which is actually a MAJOR resistance at 1.2167 area. I see EURUSD testing that 50% and maybe even push to test the 61.8% at 1.2600, but when the FED starts reducing its balance sheet then 1.2600 will become a brick wall for the EURUSD. Let's see how it plays out near the end of this year 2017.. exciting times we live in :D
Commentaire:
Dollar maybe pushing higher now.. and eurusd may test 1.2150 support