In an interview with the Wall Street Journal, US president Donald Trump overnight made it clear that in his eyes, the USD is too strong.
“I think our dollar is getting too strong, and partially that’s my fault because people have confidence in me. But that’s hurting—that will hurt ultimately.”
So what did that do to price? Let’s take a look at the USDX daily:
Yuck… Yes, that’s goodbye to USD bulls! The bears are back.
I read some commentary claiming that comments like this were unusual for a leader to make about their country’s currency, but for me it’s just the US entering back into the race to the bottom. Nobody wants to hurt their exporters and as such everyone tries to outdo each other to negatively effect their currency.
Things aren’t going to change anytime soon and this was just in response to the fact that the USDX is up over 2% since Donald Trump was elected as President of the United States.
From a trading point of view, I don’t think Trump had his MT4 charts open and noticed the trend line support that EUR/USD was sitting on (heck who knows, maybe he did!), but this jawboning just gave that little extra for price to kick on:
If you found a long entry off the higher time frame support level that we highlighted on Monday then you’re sitting pretty right now. If not then it’s now all about waiting to see what sort of pullback we get and why it comes because this is pretty good confirmation of the level holding and the market staying a buy.
Stay tuned to the @VantageFX Twitter account as we continue to follow the charts over there.
I’m off for the Easter long weekend so stay safe and enjoy yourselves. See you Tuesday!
Dane Williams – @VantageFX
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