‘Historically the dollar hasn’t fared well against reserve currencies like the euro or yen or the pound during times of U.S.-led protectionism.’ – Toronto-Dominion Bank (based on Bloomberg)
Pair’s Outlook
A positive reading of the US ADP Non-Farm Employment Change provided the US Dollar with a boost yesterday, allowing it to put the tough resistance around 114.60 to the test. Ultimately, the Buck closed with a 40-pip rally against the Yen, meaning that the ascending channel’s resistance line remains intact. From the technical perspective the US Dollar should now undergo a bearish correction, with traders taking profit of the recent rallies; however, technical indicators suggest otherwise. Due to lack of strong market movers today, another positive development is possible, but with gains limited circa 114.75. The base case scenario is still the integrity of the channel’s resistance line.
Traders’ Sentiment
Today 55% of traders hold long positions (previously 60%), while 67% of all pending orders are to purchase the Greenback (up from 57%).
