Stronger U.S. Dollar Expected

By Gerard Mastra (BT) Head Trader at Fxlivedaytrading.com

It appears that for the last few months as we have discussed in our trading course and our Forex Day Trading room the correlations are off with regards to risk on and risk off pairs.

At the moment there is a large  “risk on” factor of a weak U.S. dollar, and a corresponding “risk off” factor for a stronger USD. As Crude prices  stay strong we can see evidence  of possible inflation creeping in.  I would like to point out the huge amount of USD shorts that may get a "wake up call" this week.

If we look at stats from the CME we see  bets against the dollar rose to $36bn this is more than the previous record set in 2007.

I am not sure why these traders would crowd in, possibly it was the tone from the last FOMC? Since when does the Fed give you a heads up when they are about to impact the markets. Did the fed warn us prior to the financial crash caused by the housing bubble? Has any Govt ever lied? Oh wait that's right! The Fed is not even part of the government. They are a "PRIVATE INSTITUTION" run by shareholders. Get this straight people.

Ok, let me get a hold of myself. Let's see if we get some a stronger Dollar continue into May as I expect.

Here is a chart I would like to post of the USD.

usd index

A break above the 84.00 area would be a HUGE high volume move in my opinion. I think it may take some time and maybe some catalyst like some stock market selling or some more good news. I will be sure to re-post a short article at the end of the week. Check me out on twitter!

All The Best,

BT