Fundamental Forecast for Dollar: Bullish
November NFPs haven’t steered the Fed off course for a rate hike before year end though the ECB reaction alters the view
Anticipation for the December 16 FOMC meeting will curb trend development but not dampen volatility
See how retail traders are positioning in the majors in your charts using the FXCM SSI snapshot
A lot has changed for the Dollar this past week. Technically speaking, the Greenback has tumbled from its 12-year highs and now finds itself in a comfortable range. Proximity to critical highs or lows creates tension and can subsequently spur speculative runs for trend development. Fundamentally, the ECB decision and NFPs have wrung some tension from positioning. And, while the week ahead carries more than its fair share of important event risk, the systemically important catalysts are further out on the horizon. These circumstances will shape trading conditions for the Dollar and the broader financial markets. Anxiety will support volatility, but fostering trends will be far more difficult. Active traders should adapt to the environment while investors (longer term) should mark the change in tempo for the currency’s monetary policy advantage post-ECB and pre-FOMC.