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The US Dollar faced renewed selling pressure Friday in a move that appeared corrective following Thursday’s surge. That was inspired by comments from President Trump, who contradicted Treasury Secretary Mnuchin to signal that his administration favors a strong domestic currency. The greenback unwound all of the gains inspired by Mr Trump’s remarks, tellingly ignoring fourth-quarter US GDP data.
The Australian Dollar traded broadly higher as local bond yields rose, hinting that a hawkish shift in RBA monetary policy expectations drove the currency’s advance. A singular catalyst for the move is not readily apparent. Priced-in rate hike bets implied in OIS positioning suggests Governor Philip Lowe and company will issue one 25bps increase sometime between August and the end of the year.
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IG Client Sentiment Index Chart of the Day: Crude Oil Price
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Retail trader data shows 46.3% of traders are net-long crude oil, with the ratio of traders short to long at 1.16 to 1. The number of traders net-long is 8.4% lower than yesterday and 15.6% higher from last week, while the number of traders net-short is 11.7% lower than yesterday and 28.9% lower from last week.
We typically take a contrarian view to crowd sentiment, and the fact traders are net-short suggests crude oil prices may continue to rise. Yet traders are less net-short than yesterday and compared with last week. Recent changes in sentiment warn that the current crude oil price trend may soon reverse lower despite the fact traders remain net-short.
Five Things Traders are Reading:
- Weekly Trading Forecast: Can FOMC, Jobs Data Lift the US Dollar? by DailyFX Research Team
- Dollar and Equities to Focus on US Protectionism over Fed Policy Next Week by John Kicklighter, Chief Currency Strategist
- Traders Urged to Respond to Proposed European Rule Changes by Martin Essex, MSTA, Analyst & Editor
- EUR/USD Weekly Technical Outlook: Is the Euro ’There’ Yet? by Paul Robinson, Market Analyst
- Bitcoin Elliott Wave Forecasts Dominant Bearish Trends by Jeremy Wagner, CEWA-M, Head FX Trading Instructor
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