The USD, like most of us, will like to see the passing of 2020. Its been a bad year for the Greenback, as the long overdue, global reflation trade emerged with the Covid – 19 vaccine. The USD has given up significant ground to all of its major counterparts since putting in its top on March 23rd. However, market trends are not linear and observe corrective phases. Various charts presented below show that there is technical evidence of an imminent Greenback correction. If indeed we are right and the Greenback commences its corrective phase then we expect Commodities, Commodity FX and Emerging markets to commence their own corrective phase after stellar returns in 2020.
1. USD Index vs Major FX
2. EURUSD Weekly & 4h Chart: Weekly MACD divergence a harbinger for EUR corrective phase, double top today on the 4hr chart?
3. Our USD Index preferred Elliott Wave count suggests a mature trend and possible 5 waves completed
4. USD Index Breadth chart in ‘Oversold’ territory
5. Keep an eye on USDCNH!