The Buck Gets Beaten Up and There’s No Dr. to Help
Skerdian Meta • 2 min read
The USD was weak last week, particularly when compared to the Yen. But in the last few hours of Friday, we saw the USD buyers put up a last minute fight, which led me to believe think that this week may start in favour of the USD.
This wasn´t the case, and it was clear from the minute that the forex market opened. All forex majors opened with a gap which went against the Buck.
EUR/USD opened around 40 pips higher last night which took the price to SL of our sell forex signal in this pair. The USD beating is happening as we sit here. GBP/USD has pushed around 100 pips higher from the opening levels last night.
I don´t see any obvious reason for this, other than Trump´s failure to pass the health care bill. But on the other hand, we have known he failed to pass the bill since Friday when the market was still open and the Buck didn´t even blink.
Perhaps over the weekend, the market realized that Trump isn´t going to suceed in passing the bill easily. He partly blamed conservatives for this and that might be the reason for the USD's weakness today.
Tax reform is next, but if the Conservatives can´t pass the health bill, it will be damn hard to suceed with the tax reform. That´s what the market is worried about right now.
By the way, it's a bit too late to go against the USD now. So if you´re thinking of trying a small forex trade during a possible retrace, then you should look at AUD/USD. The Aussie hasn´t been able to take advantage of the USD, despite the Buck losing across the board.