Joe Biden has officially been inaugurated as the new acting president of the United States. Surprisingly, the markets had a dull response to his ceremony and speech. Short-term technicals point to a bullish Dollar, while the long-term downtrend is still present.
Yesterday, price action analysis found the DXY to be bearish for the day. As a result, traders took short positions for USDCAD. The final target was last week’s low and it was met earlier today. Depending on entry, traders were able to walk away with 70-100 pips of profit on this intraday trade.
At the moment, both price action and smart money agree on the Dollar’s short-term and long-term trajectories. The Dollar is bullish for the near-term, with potential upside objectives near 91.00. If tomorrow’s US manufacturing data prints a bullish result, price may attain this target by the end of the day. In the long-term, the Dollar is still bearish as the higher time frames show the downtrend is still being respected. The next downside objective is the low price made at the beginning of January.
Later today we will have the Australian unemployment data release where forecasts are currently mixed. Traders should take note that so far this year, fundamentals are causing unusual reactions in the markets. Positive data has not always led to strength in a currency and vice versa. A combination of both technical and fundamental analysis is recommended.