The US Dollar has been bullish for months... Global economic uncertainty caused by inflation, COVID, and the Russian and Ukrainian conflict have caused cash to flow to USD assets. Could the USD be currently over-valued? My analysis suggests that USD price is due a retrace move, especially on very over-extended pairs such as USDCHF, USDJPY, EURUSD and GBPUSD... Analysis for USDJPY and GBPUSD below...
USDJPY - 9 consecutive bullish weeks (almost a record?) Weekly RSI currently hitting over 88. Lower time-frames show weakening upside momentum. Possible retrace move due to previous monthly resistance at 124.00. I am expecting the retrace move to start by the end of June (hopefully this week as I am already holding out of the money USDJPY put options)
GBPUSD - testing key support area around 1.2200. Weekly RSI hitting around 22. Possible inverted head and shoulder trend reversal pattern (or range) on the weekly time-frame. I am expecting the retrace move to start by the end of June (hopefully this week as I am already holding out of the money GBPUSD call options).
Don't get me wrong, I expect the USD bullish trends to continue, perhaps now is just a good time to get off any long positions and open those shorts... Fingers crossed!
USDJPY - 9 consecutive bullish weeks (almost a record?) Weekly RSI currently hitting over 88. Lower time-frames show weakening upside momentum. Possible retrace move due to previous monthly resistance at 124.00. I am expecting the retrace move to start by the end of June (hopefully this week as I am already holding out of the money USDJPY put options)
GBPUSD - testing key support area around 1.2200. Weekly RSI hitting around 22. Possible inverted head and shoulder trend reversal pattern (or range) on the weekly time-frame. I am expecting the retrace move to start by the end of June (hopefully this week as I am already holding out of the money GBPUSD call options).
Don't get me wrong, I expect the USD bullish trends to continue, perhaps now is just a good time to get off any long positions and open those shorts... Fingers crossed!