one of the rationale behind long usd vs other currency pairs was that there were catalysts in the market that were going to lift USD off its long term support:
No fx trend for the time being as this support line is worth watching. EUR, CAD, GBP, AUD are all about to finish February on the highs, some we might see follow through in March. dollar weakness is likely being attributed to interest rates differential as most of the central banks, with the exception of the US, either started raising rates already or started preparing the market for rate hikes. Still I doubt ECB or BOE will raise rates anytime soon given ongoing problems in Europe.
There are plenty of catalysts, unresolved questions going forward arguing for a trend change in USD. debt, revolutions, inflation, etc... I have to admit though that FED's stubbornness regarding "there is no inflation" theme is astonishing. Feels like FED is 6 month behind the curve... Will March be the month when inflation will finally filter through? price inflation is already there. the question is in my opinion, whether it will be stagflation like in the US, or out of control bubble like in China? sorry still have no faith in this "recovery"
and on the good note, here's the market that had been underloved by many... NYMEX natural gas
Spec net short position is standing at all time high (people are very short):
however front month is up 25 cents already since last friday low... the one who covers his short first - wins!
