– The one-two combo of Chair Yellen and Mario Draghi helped to re-lift short-term price action in the U.S. Dollar over the past 24 hours. And this brings the potential for short-term momentum in the Greenback to line up with the longer-term bullish up-trend.
– With the Inauguration of President-Elect Donald Trump taking place tomorrow, traders will likely want to be on-guard as markets have been extremely sensitive to any innuendo from the President-Elect. This can create a rather illiquid environment that can further drive volatility.
- If you’re looking for trading ideas, check out our Trading Guides. And if you’re looking for ideas that are more short-term in nature, please check out our Speculative Sentiment Index Indicator (SSI).
In yesterday’s article we looked at how the U.S. Dollar retained a bullish long-term setup, but on short-term charts matters were quite different. Near-term price action in the U.S. Dollar has been markedly bearish since shortly after the open of the New Year. And this is fresh on the heels of a near-historic run in the Greenback on the heels of the U.S. Presidential Election.
In reality – not much has changed over the past two and a half weeks, outside of short-term price action, of course. The one item that might stick out as a potential driver for USD-weakness could be President-Elect Trump’s comments against the ‘strong Dollar policy’ in an interview a couple of days ago; but given the executive branch’s lack of control over monetary policy (Executive branch of the U.S. Government impacts fiscal, not monetary policy) those comments might not be as relevant as what we might hear from Fed Chair Janet Yellen. And yesterday Chair Yellen offered comments that were broadly supportive of further rate hikes this year, echoing the bank’s sentiments from their December rate move in which they also said they were expecting three hikes in 2017.
