The USD is at record lows against the CHF and the NZD and is close to record levels against the AUD and the JPY. Even for a committed contrarian like myself, this trend looks still too strong to fight. Confidence is a very strong factor in any financial market and the FX market has little confidence in US politicians to sort out their financial mess. Even if they do come to some short term solution, the long term move away from the USD is likely to continue.

  • EUR/USD is consolidating above technical support near 1.4300 and below option levels at 1.4450/1.4500. It’s hard to get overly bullish on the EUR but given the current events in the US, buying dips looks like the more sensible short-term strategy.
  • I never thought I’d live to see the day where USD/CHF is trading just above .8000, and looking still heavy! I’ve tried picking a bottom in this pair over the last year and have been lucky to get away with it without losing my shirt. It will turn someday, but not someday soon by the looks of things.
  • The only pair where I think a case can be made for building a medium term long USD position is in USD/JPY. The Japanese economic and fiscal position has its own headwinds to deal with and the BOJ is keen not to let the JPY strengthen too much. Lets wait and see what happens if the market breaks below 75.