This text is from blog famous currency strategist Joel Kruger .
FISCAL CLIFF UNCERTAINTY; TECHNICAL CLARITY – Whether a US fiscal cliff deal gets done, and exactly what type of deal is the question on everyone’s mind right now. Markets are likely to be primarily driven off this central theme over the coming sessions, and the outcome is sure to have a broader impact on the US Dollar’s direction. However, given the uncertainty, I will defer to my technical bias for this one, which argues for an eventual breakout in the buck’s favor. My analysis still shows currencies overvalued against the US Dollar and due for meaningful pullbacks over the coming months, with some markets more exposed than others.
See daily forex technical analysis video made by Joel:
ON THE BOOKS – I am currently most invested in a short AUD/USD position from just over 1.0400, and will be on the lookout for a drop back under parity into early 2013. I will also be looking for opportunity to re-buy USD/JPY on dips, but at this point, I can not recommend getting involved until the market is showing oversold on the daily chart. The daily chart has really exploded over the past few weeks, and the best thing to do right now is wait for a sizable short-term pullback before taking advantage of the longer-term bullish structural shift. Moving on, I will continue to look to buy EUR/AUD dips, and will also contemplate long positions in EUR/CHF, USD/ILS and USD/SGD. Other opportunities will present throughout the year, and I am very excited for 2013! Wishing everyone a happy and healthy New Year!!
