USD to pay the price of Trade War by fading FED hawkish tone!
As you know we have seen on Thursday and Friday sessions USD made a significant reversal and it looks like USD is going to fade the FED hawkish tone and ECB long-term plan is going to be in play earlier.
The reversal started Since one of the chief economist on BoE voted for a rate hike on August and that cause an impulsive move on Sterling and soon EURUSD followed that move after false breaking out of the lows.
A lot of people are short EURUSD and as you know my target hit on both EU and GU shorts but now I am on EU.
Here is the weekly USD weighted average. See the shooting start.
As you can see bears took the control particularly as EURO retaliates tariff on US goods on Friday.
USD has a hard work to break the upper band of the Flag and break through EMAs and if it does then USD will be for long time. But for now it is just a pullback or retracement.
We need to exit EURUSD Long next week if we see a sign of bounce on USD.
TNX also after false breaking the 2016 high is pulling back and the question is that is it making a right shoulder?
USD bonds also going to retest the highs again and we expect and opposite correlation between bonds and USD.
Have a great trading week ahead my dear friends.