Talking Points:
• The USDollar shifted from unrelenting bull trend to nearly a year of consolidation
• A cap on bulls remained in place despite the Fed confirming its dive into a hawkish rate regime
• Trend will likely remain elusive until the second hike is confirmed or written off, but volatility will remain
See the DailyFX Analysts' 1Q forecasts for the Dollar, Euro, Pound, Equities and Gold as well as our favorite 2016 trading opportunities in the DailyFX Trading Guides page.
If you're waiting for the EURUSD to clear its 1.1500-1.0500 band or AUDUSD to recharge a four-year bear trend; you may be waiting a while longer. From these majors, much of the dramatic moves over the past years has come in large part from the improvement in the Dollar's fundamental bearings. Yet, that drive has tapered as the first major milestone - the Fed's return to rate hikes - came and went. Progress on the next milestone is waded down in the disparity in expectations and the complexity of outcomes. Whether or not the Fed will take the serious leap of pulling the trigger on the second hike to make it a regime may very well exact greater influence on the Dollar and markets than the initial liftoff. That said, expectations are stubborn though December's change taught some about the dangers of inflexibility. What can set off the Dollar's next trend and what will the currency's pace be through the foreseeable future? We discuss that in today's Strategy Video.
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