USD Stands Tall On Rally

As ECB President's delivering a 10bps rate cut to new record low of 0.05% today; justifying such move was more towards credit easing so banks can lend more rather than a QE move which everyone was expecting. This has moved the deposit rate into negative territory at -0.20%. Although, this was just one of the highlights, where the Jobs #204K stayed above the expected levels, a narrowing trade deficit, while momentum gathered pace soon after the news broke-out which have provided a firm lift above the 83.50 target price call that we have set for the DXY to move towards to.

Having missed the move on the Euro is not as bad, since our focus to maintain our CABLE position as it continues to decline from its high @1.7192 towards the current price @1.6350 as of this writing. Aiming its probable direction towards the @1.6180 extension price level. Although, a spill over effect in Asia and the European markets would not be discounted moving forward. Sentiments have firmed among USD bulls that a more positive outlook for the US economy is underway over and above the flight to quality comparing a EURO decline and forward looking for ECB easing in the near future.

Meanwhile, the USDJPY @105.30 target was indeed achieved from the support of the USD movement which has gained a full basis point move from the opening of the month and its has only been just a few trading days. Adapting to wet climate conditions (high volatility & momentum driven markets) would determine the breath of market sentiments and the directional trend. In this case a strong follow-through on the USD rally justifies that indeed the flight to quality for the USD stands tall against a back drop of geopolitical uncertainty.

Full Insight: USD Stands Tall On Rally