When Does A Soft Dollar Lead To Soft Stocks? - May 18, 2021 - Forex Anatomy

When Does A Soft Dollar Lead To Soft Stocks? – May 18, 2021

What began as a bullish turnaround in sentiment, towards risk-on trading, eventually became another day of price fluctuations and lack of conviction in financial markets across the board.

At the start of today’s webinar, the US Dollar continued it’s slide lower, on poor prospects of the FED altering their monetary policy in light of increasing price pressures seen in rising commodity costs and raw input costs that may dampen economic growth projections. The FOMC is dead set & strict on their decision to provide monetary stimulus to the economy and keep the Fed funds rate low as a supportive tool until they observe consistent signs of economic recovery from the improving pandemic.

But, prior to the US Opening Bell, equity future indices, along with other risk assets, slid back from their highs as conflicting data & headlines kept certain instruments glued to their opening ranges. During today’s trading webinar, we discussed this financial “oddity” of a soft dollar, along with soft stocks narrative, and if central banks will be pressured to tighten monetary policy much sooner or ahead of their projections.

For a good portion of the webinar, we analyzed price action in USD/MXN, AUD/USD, EUR/GBP, $DXY, USD/CHF, $DOGE (XDG), $BTC (XBT), and Cardano (ADA/USD) to identify technical setups that were forming in the market for trade entry. 🔔 On today’s webinar, we were also able to enter a buy on AUD/USD at 0.7799. ⛔️ SL – 0.7790. 🎯 TP – 0.78165. The AUD/USD trade closed out at its break even price.  We also executed a swing trading opportunity to sell EUR/GBP at current price of 0.8605. ⛔️ SL – 0.8628 🎯 TP – 0.8547. You can watch this morning’s trading webinar session by clicking on the video link above and entering your username & password.


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About the Author Marvin Perry

Marvin Perry has been an active trader within the Forex market since 2010. He attended the University of Illinois in Urbana/Champaign, and graduated in 2002 with a double major in Cell and Structural Biology and Chemistry. He currently serves as an FX instructor & Quantitative Analyst for the Forex Anatomy Private Trading Community called "The Lab", where he conducts live weekly trading webinars & instruction on Fundamental Analysis & Inter-Market Interpretations of dynamic asset classes and their influence on currencies.

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