The greenback continues to give back last week's gains, falling just shy of the 1.56-level and 104 against the yen. The dollar remains under pressure amid soaring oil prices, with crude oil surging to another record above $122 per barrel and fresh calls oil to reach $150 to $200 barrel over the next two years.
Markets will turn to US economic data on Wednesday, which consist of Q1 labor costs, preliminary Q1 productivity and pending home sales.
At 10:00 a.m. we will have U.S. Pending Home Sales m/m. This is not a key indicator but you can try to make a few pips on it. I would use more aggressive trigger on the positive deviation. If it comes out at 0% or positive, it would be a buy signal on USD/JPY and I would look for 30 to 40 pips of a price action in the first hour of the report. If it comes out at -4% or more negative, I would sell USD/JPY and expect 30 to 40 pips move as well.
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