The negative tone of
the US Federal Open Market Committee caused a dumping of the US dollar after
the committee kept US revenues unchanged, in order to push investors to sell
the US dollar for almost everything.
While the dollar index
fell to a low of 90.55, a further decline may happen if positive data for the
US GDP is not released this evening, as the dollar index could fall below
90.00.
If the weakness caused
by the US Federal Open Market Committee continues with new negative data from
the United States of America, it is expected that the US dollar will test
further weakness against most major currencies, and the targets in that case
will be as follows:
EUR USD: 1.2250
GBP USD: 1.4300
AUD USD: 0.8000
NZD USD: 0.7500
USD CAD: 1.2000
USD JPY: 107
The funny thing is
that the Chinese yuan also benefited from the drop in the US dollar, to trade
at 6.4715
Currently, we cannot
advise traders to open long positions on the major currencies against the US
dollar, as the US dollar can regain some strength based on any positive news or
announcements, but we also cannot advise to start opening short positions currently
during the heat of the US dollar’s decline.
Therefore, we prefer
to remain neutral until next Monday, waiting for the markets to absorb the
chaos created by Mr. Jerome Powell yesterday.
But the most important
thing now is that what happens will clearly support confidence in
cryptocurrencies, as investors realize over time that their money is hostage in
the hands of central banks that can reduce its value at any time through a
press conference or decision, and that a new economic plan, such as the new US
President’s plan, will be adopted. Always control the investors' money without
their will
Specifically, this is
what gives cryptocurrencies what they need to gain more confidence, as they are
outside the control of the US Federal Reserve and the rest of central banks,
and the past days have proven that all hostile positions taken by central banks
do not affect these cryptocurrencies except momentarily and temporarily.
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