We’re currently seeing incredible US-Dollar improvements in almost all USD pairs. Not only due to it’s safe haven status, but also due to improving US economy and weak Euro, Yen, Comdolls and GBP. But there ought to be a limit. Just several months ago, the Euro was climbing high and at the time EUR/USD hit the 1,40 mark, Draghi started his campaign to weaken the Euro and boost the economy, since a high Euro meant less export. From there on out, EUR/USD dropped by more than 1000 pips in a free fall!!!
I am wondering, where is the limit for the USD? Will the Fed start acting once the USD hits a limit? When do you think the limit might be reached? Do you think the US economy will fall into slumber again in the winter time, like it did last winter?
We asked the same thing about the Euro, the pound and the NZD. For the latter two, they seemed to be very resilient and then one day, they just casually topped without a lot of people realising it. One corrective selloff was followed by one selloff due to a weak data followed by a selloff due to a central bank statement and then repeat. Similarly, the USD could top in the next few days or could wait for the FOMC press conference. But in forex, it is never smart to attempt to pick top and bottoms.
That’s very true. I thought I didn’t look right when the RBNZ hiked rates, but the NZD dropped. As for the Pound, I still don’t see why there’s such a sharp sell off. That’s Forex I guess.
I was just wondering if someone knows certain levels, at which one might assume the Fed would start to intervene. USD/JPY has already hit levels as high as 6 years ago. But as of now, there’s even talks of raising the interest rate of the USD. So I guess I’ll be going long on the USD for now.
