Adam Button of ForexLive.com explains why he feels like there are only two currency trades he can see as possibilities at the moment; US dollar longs or the sidelines.
There are only two trades at the moment: the sidelines and dollar longs.
The dollar is beating up on the yen and commodity currencies at the moment. USD/JPY ran into some buy stops after breaking Thursday’s high of 105.71. That followed by a quick 15-pip move.
Similar story in USD/CAD as it ripped to 1.0985 after breaking last week’s high of 1.0942.
I suspect asset managers who were on the sidelines waiting for the smoke to clear last week are scaling into US dollar-denominated positions. It’s very difficult to make an argument against USD longs at the moment and the technicals get better every hour. Hedgers are beginning to scramble and that could keep these moves going for awhile.
By Adam Button, Editor, ForexLive.com
