The US dollar is off its lows against major currencies, with EUR/USD trading at 1.0750, USD/JPY at 113.20 and GBP/USD licking its wounds at 1.2530. Here are reasons why this could be a selling opportunity on the USD: This is only a correction: The greenback gained strength without any clear event related to the move. A correction is necessary within the general trade, but could be short-lived. NFP expectations are too high: After ADP and ISM manufacturing beat expectations, the real estimates for the all-important Non-Farm Payrolls report are probably higher than the 170K implied in official calendars. Sure, the actual outcome could certainly meet the higher projections: job gains could easily top 200K and annual wages could continue advancing, perhaps topping 3%. However, this is already priced in. We could see a “buy the rumor, sell the fact” phenomenon. Weak dollar desired by the Donald: The new US President is completing his second week in office. While we should wait 100 days, it is fair to say that so far, trade wars with the likes of Mexico are more frequent on Trump’s agenda than fiscal stimulus. This is not what markets were subscribing for. The USD rally was based on hopes for the best (tax cuts, infrastructure spending) and ignoring the worst (trade wars, conflicts). So far, it is not materializing. Worse off, Donald Trump and his economic advisor David Navarro have both been talking about other currencies doing competitive devaluation. Navarro bashed Germany’s euro advantage and Trump referred not only to China but also Japan. If the US administration is seeking a weaker dollar, they may get it. This change of tone has not been fully digested by markets. More: trading the NFP with EUR/USD Yohay Elam Yohay Elam Yohay Elam: Founder, Writer and Editor I have been into forex trading for over 5 years, and I share the experience that I have and the knowledge that I've accumulated. After taking a short course about forex. Like many forex traders, I've earned a significant share of my knowledge the hard way. Macroeconomics, the impact of news on the ever-moving currency markets and trading psychology have always fascinated me. Before founding Forex Crunch, I've worked as a programmer in various hi-tech companies. I have a B. Sc. in Computer Science from Ben Gurion University. Given this background, forex software has a relatively bigger share in the posts. Yohay's Google Profile View All Post By Yohay Elam Opinions share Read Next Non-Farm Payrolls beat with 227K but wages miss with Yohay Elam 6 years The US dollar is off its lows against major currencies, with EUR/USD trading at 1.0750, USD/JPY at 113.20 and GBP/USD licking its wounds at 1.2530. Here are reasons why this could be a selling opportunity on the USD: This is only a correction: The greenback gained strength without any clear event related to the move. A correction is necessary within the general trade, but could be short-lived. NFP expectations are too high: After ADP and ISM manufacturing beat expectations, the real estimates for the all-important Non-Farm Payrolls report are probably higher than the 170K implied in official calendars. Sure, the… Regulated Forex Brokers All Brokers Sponsored Brokers Broker Benefits Min Deposit Score Visit Broker 1 $100T&Cs Apply 0% Commission and No stamp DutyRegulated by US,UK & International StockCopy Successfull Traders 9.8 Visit Site FreeBets Reviews$100Your capital is at risk. 2 T&Cs Apply 9.8 Visit Site FreeBets Reviews$100Your capital is at risk. 3 Recommended Broker $100T&Cs Apply No deposit or withdrawal feesTrade major forex pairs such as EUR/USD with leverage up to 30:1 and tight spreads of 0.9 pips Low $100 minimum deposit to open a trading account 9 Visit Site FreeBets ReviewsYour capital is at risk. 4 T&Cs Apply Visit Site FreeBets ReviewsYour capital is at risk. 5 Recommended Broker $0T&Cs Apply Trade gold, silver, and platinum directly against major currenciesUp to 1:500 leverage for forex trading24/5 customer service by phone and email 9 Visit Site FreeBets ReviewsYour capital is at risk.
