Alerts

USD Outlook: Indicators Rising for a Potential High Amid Crowded Positioning

USD Evaluation and Speaking Factors

Easing Commerce Struggle Tensions Forward of G20 Summit to Stress USD

Crowded USD Lengthy Positioning Limits Additional Upside

US Greenback outlook over the quarter

Easing Commerce Struggle Tensions Forward of G20 Summit to Stress USD

A Monetary Instances report on Thursday instructed that China and the US had been making enormous strides to succeed in an settlement forward of this month’s G20 summit. Consequently, this helped buoy danger sentiment, whereas additionally denting the energy within the US Greenback with tensions easing considerably earlier than President Trump and Xi’s supposed meet. Nevertheless, whereas the settlement will probably be on a framework to proceed additional commerce talks, versus a grand deal, which was additionally implied by US Commerce Secretary Ross. Optimistic sentiment might proceed forward of the G20 summit, in flip preserving USD energy at bay.

Crowded USD Lengthy Positioning Limits Additional Upside

Given the expansion divergence between the US and the remainder of the world, alongside the continued decide up in US yields. Speculators have continued to pile into USD longs to a degree the place the commerce is getting more and more crowded with internet longs valued at roughly $30bln, in keeping with the CFTC report. As such, with positioning arguably stretched, additional upside within the US Greenback from present ranges is seemingly restricted. Consequently, with the potential for the US Greenback to start topping out, bearish US Greenback could also be finest expressed via USDJPY shorts.

USD Outlook: Signs Growing for a Potential Top Amid Crowded Positioning

US Greenback Value Chart: Every day Time Frame (JanuaryNovember)

USD Outlook: Signs Growing for a Potential Top Amid Crowded Positioning

Chart by IG

Whereas the US Greenback sticks inside the rising channel. The bearish RSI divergence suggests prime within the US Greenback could also be approaching. Eyes on for a break beneath 95.85 earlier than a transfer in the direction of 95.15 with resistance located on the 97.00 deal with.

— Written by Justin McQueen, Market Analyst

To contact Justin, e-mail him at Justin.mcqueen@ig.com

Comply with Justin on Twitter @JMcQueenFX


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