This Last Move Reassures Us of the USD Uptrend
Skerdian Meta • 1 min read
The USD was on a massive downtrend for around 15 months. But, this trend has now changed. I don’t like to be too sure about anything in forex, because as you know, everything changes in a heartbeat in this business. That’s why we must always keep an open mind.
Although, we can’t argue with the uptrend of the USD in the last two weeks, it has been going up without any objection at all, breaking all major support and resistance levels in major pairs without any hesitation.
So, I don’t like to be all too certain about any trend, but the price action is giving me little choice. The average hourly earnings (wages and salaries) declined by 0.2% from last month, taking the actual number to a mere 0.1%. That’s really disappointing considering that the wages started to pick up this year.
The FED is putting all its’ money on wages and inflation, which they also highlighted on Wednesday. They didn’t explicitly mention that on Wednesday, but they did say that this data will lead the monetary policy and we know what piece of data they are looking at. It’s these two aspects of the economy that have been quite soft in the last few years.
Today, wages are down by 2 points, but the USD is up. It did tremble for a while after the release and we saw a knee-jerk reaction, but the buyers were quick to jump in. The Buck is making new highs against most major forex pairs so the uptrend has resumed again. We haven’t seen this sort of price action since January last year, so we can’t deny the buying pressure. The uptrend is in full swing for the USD and I am awaiting a retrace now to sell GBP/USD again.