Hello traders,
The US dollar has been in a strong downtrend in the recent months as risk sentiment improved significantly. Markets are always looking 6 to 18 months in the future, and positive vaccine news promises global economic recovery in the next year.
Moreover, US President-elect Biden's plans to increase fiscal spending puts additional selling pressure in the US dollar, and rising stock valuations attract funds to the market and increase USD supply.
The latest CFTC report showed that the aggregate USD short position increased to USD 27.1 billion. The current positioning has some room to go until it reaches a 52-week extreme positioning. Because, if everyone is already short, who will be selling?
Seasonality trends based on the last 33 years show that the US dollar tends to have a bearish bias into the year end, starting from mid-November.
Given that the end-of-year rally in stocks will likely put further selling pressure on the greenback, we could soon see the 88.xx area and even a break below.
Please hit the "LIKE" button if you find any use in this post, and don't forget to comment!
The US dollar has been in a strong downtrend in the recent months as risk sentiment improved significantly. Markets are always looking 6 to 18 months in the future, and positive vaccine news promises global economic recovery in the next year.
Moreover, US President-elect Biden's plans to increase fiscal spending puts additional selling pressure in the US dollar, and rising stock valuations attract funds to the market and increase USD supply.
The latest CFTC report showed that the aggregate USD short position increased to USD 27.1 billion. The current positioning has some room to go until it reaches a 52-week extreme positioning. Because, if everyone is already short, who will be selling?
Seasonality trends based on the last 33 years show that the US dollar tends to have a bearish bias into the year end, starting from mid-November.
Given that the end-of-year rally in stocks will likely put further selling pressure on the greenback, we could soon see the 88.xx area and even a break below.
Please hit the "LIKE" button if you find any use in this post, and don't forget to comment!
