Is The U.S. Dollar Over-Sold?
MaiMarFX | Dec 05, 2022 08:32
The U.S. dollar weakened across the board since the market has been pricing in an increasingly dovish Federal Reserve. However, traders worry that the latest sell-off could be an overcorrection in the greenback. The U.S. jobs report came in better than expected, showing 263k jobs in November and a steady 3.7 percent unemployment rate. This means that the jobs market remains tight which is not something the Fed will like to bring inflation down.
From a fundamental perspective, this week’s economic calendar is relatively light. Traders are looking towards next week’s central bank decisions for potential drivers.
Technical view
EUR/USD
The upward correction appears to be somewhat overstretched with the euro now testing the upper descending trendline of its primary downtrend. If the euro breaks above 1.0620, bulls may try to push it towards 1.07 and 1.0770 but given overbought price levels, a correction towards 1.0370 becomes more likely.
GBP/USD Similar is the picture in the cable. The recent upward movement looks overstretched while entering a resistance zone between 1.2250 and 1.2650. Given the straight-lined upward movement we anticipate pullbacks towards 1.2050-1.20.
Our trading ideas for today 5/12/22:
EUR/USD
Long @ 1.0590
Short @ 1.0530
GBP/USD
Long @ 1.2330
Short @ 1.2270
DAX® (GER40)
Long @ 14580
Short @ 14490
Settings for all trades today: Entries from 8:00 am UTC, SL 25, TP 40
Disclaimer: All trading ideas and expressions of opinion made in the articles are the personal opinion and assumption of MaiMarFX traders. They are not meant to be a solicitation or recommendation to buy or sell a specific financial instrument.
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