What happened yesterday was exactly what I anticipated in my previous blog post. Some profit taking (ahead of the long weekend in the US) revitalized US dollar. As a result, I not only broke even, but I’m actually up for the week and back on the second place in Trader’s Contest.
But was it only the profit taking? We have been getting remarkably good economic data from the US this month, showing that the inflation is suddenly picking up. Yesterday’s housing stats also showed a big improvement. All this tells me that euro, the pound, antipodean currencies and the others are slowly showing signs of exhaustion of their trends. Next week we get FOMC minutes which will remind the investors that FED hikes are coming, and possible as many as four this year.
In other words, dollar dumping is nearly over. I doubt EUR\USD will be able to go beyond 1.26. This is it - get ready for a stronger dollar.
But was it only the profit taking? We have been getting remarkably good economic data from the US this month, showing that the inflation is suddenly picking up. Yesterday’s housing stats also showed a big improvement. All this tells me that euro, the pound, antipodean currencies and the others are slowly showing signs of exhaustion of their trends. Next week we get FOMC minutes which will remind the investors that FED hikes are coming, and possible as many as four this year.
In other words, dollar dumping is nearly over. I doubt EUR\USD will be able to go beyond 1.26. This is it - get ready for a stronger dollar.
