Hi there traders.
Quite a choppy week in the markets this week but USD shone brightly by the end of it. The weekly chart of the Dollar Index below shows a nice bounce off the 20 moving average in blue last week and now pushing towards the 50 moving average in red which is round about the $93.00 mark. Keep an eye around that level to see if we get any market reaction and possible short term sentiment change.
For those of you that don’t know, the U.S. Dollar Index is a measure of the value of the U.S. dollar relative to the value of a basket of currencies of the majority of the U.S.’s most significant trading partners. They are the Euro, Swiss Franc, Japanese Yen, Canadian dollar, British pound, and Swedish Krona. The value of the index is fair indication of the dollar’s value in global markets.
In the early hours of the Asian session on Monday the Turkish Lira collapsed after President Erdogan fired the central bank governor over the weekend.
Governor’ Agbal’s crime was a big rate hike. The new governor was appointed 4 months ago – Agbal was hiking to fight inflation and to try to restore credibility to the central bank. Lira bulls had expected rate to rise further and were comfortable being long.
New Zealand Dollar
The Kiwi was in free fall this week as it broke convincingly below daily support at 0.7100 and then through the next ‘big number’ 0.7000
Unless traders were already in short trades, the sharp drop didn’t give any opportunities to trade unless you were willing to move down to the 5 to 15 min time frames looking for small correction. Some say the NZ government announcing curbs to ease housing prices may what kicked things off. The truth is we my never know.
Strength & Weakness Indicator
We launched our very first indicator for MT4 this week. Trading is about matching the strong and weak currencies because it is those pairs that will create the most movement and gives us great opportunities to make valuable pips. FX Tiger tells you the strongest and weakest currencies on any given timeframe giving traders an edge in the markets. The revolutionary new indicator has now been released to the general public for a free trial. If you are interested then click here.
So from all of us at Trade & Train have a great weekend and stay safe.