It has been a contrarian trade that has not yet worked out; by that I mean my short position on the Euro and preparation for a firming US dollar. Yesterday the market cheered the supposedly dovish Fed, and USD got smeared again as the world’s counter party paper boosted assets far and wide… on nothing but perceptions and a hell of a lot of momentum and gaming on FOMC day.
USD opened weak again today but so far at least, is sporting a Hammer which, if it stays in play, would be a bullish reversal candle.
Regardless, whether that is a bullish Hammer or not, Uncle Buck is due for a contrary bounce and it is coming due soon. Reference this ‘Currencies’ excerpt from this week’s NFTRH 457
and in particular, the sentiment and CoT profiles. Here is the over-bearish public opinion (graph courtesy of Sentimentrader, mark ups mine)…
From a post-FOMC update to subscribers yesterday…
I hate to be a party pooper, but in seeing all kinds of commodities and anti-USD items ramping up now and seeing this picture of USD making a new low, post Fed, I am brought toward the point of having to admit I was wrong on USD. I am toward that point but ever plucky, am not at that point! Not on FOMC hype and algos’ and robots’ reactions. I am still holding the euro short.
What’s more, I am actually feeling more bullish on the dollar as I think about it. The sentiment profile was stacked against Uncle Buck [contrary bullish] before today and I am wondering about exclamation points and the like. As in, could this week mark a low?
Anyway, just letting you know the captain is continuing to go down with his USD ship until it takes on a critical mass of water. There was an article at MarketWatch today citing a strategist at PIMCO talking about why the Trump admin is bad for USD and therefore, bearish. A well placed contrary indicator? They don’t all work, but I want to let it breathe a bit more and see.
