Morning Preview: Get Ready for More USD Weakness
Rowan Crosby • 1 min read
Last week wasn’t a good one for the USD. At the close of trade the Greenback was down across the board, as traders were getting nervous about Hurricane Irma and more weekend action from North Korea. The US dollar index lost 1.6 per cent last week and is trading at the lowest levels since late 2014.
On Mondays trade I’m looking for a bit of a rebound in the USD. As I eluded to in Friday’s Signals Brief, I suggested that traders would be looking to place a bit of hedge prior to the weekend and that meant focusing on USD/JPY, USD,CHF and gold. If those same traders unwind those positions we might get some strength back into the USD.
Can the Yen Retrace?
In early Asian trade the USD/JPY has opened higher. I’m looking for a bit more strength to come back into the USD and push the currency pair higher.
Assuming we don’t get any ‘flight-to-safety’ type headlines, then there’s a chance we can push back to the key 109 level over the course of the trading day. However when US and European traders enter I’ll be looking for the gap to close and I think we need to maintain a bearish bias as we start the week.