Talking Points:
- The US Dollar[1] has started off Q3 in a rather directionless manner, first rallying and then pulling back, and we’re very near where we started the fresh quarter. The big question around the Greenback as we move deeper into the second-half of the year is whether the strength that showed in Q2 has continuation power, or whether that was but a blip in the radar of the longer-term trend. If you’d like to see the longer-term Quarterly Forecast on the US Dollar, DailyFX has recently released our forecasts as part of our Trading Guides, which are available directly from the following link: DailyFX: US Dollar Q3 Forecast[2].
- EUR/USD[3] has started off Q3 with a re-test of a key zone of resistance, and short-term dynamics indicate that we may get a deeper retracement before the bearish trend is ready for resumption. USD/JPY[4], meanwhile, has not been shy about setting fresh highs as the pair has moved to a fresh five-week high as we open Q3. The big question around the Yen is whether another spate of weakness develops, and this is likely tied to the larger themes of global risk aversion. With inflation in Japan remaining tame, and the ECB moving towards stimulus taper, the door can remain open for Yen weakness should ‘flight to quality’ or ‘safe-haven’ themes take a back seat to the ‘risk on’ trade.
- DailyFX Forecasts on a variety of currencies such as the US Dollar[5] or the Euro[6] are available from the DailyFX Trading Guides page[7]. If you’re looking to improve your trading approach, check out Traits of Successful
