Risk-On Can Continue Amid USD/CNH's Corrective Rally
Gregor Horvat | Feb 03, 2023 04:57AM ET
We saw a nice and strong reversal on the markets yesterday after the ECB press conference when EUR/USD fell sharply and USD rallied across the board.
These intraday moves look impulsive, so more USD strength can be seen but don't forget on US Jobs data today. Everyone thinks that job data will worsen sooner or later, and when that's the case, it will be a shocker for the markets; stocks can move sharply down first on recession risk but then likely to recover on dovish speculations.
US equities are strong this week, but notice that USDCNH pair is not breaking down yet. It is still seen in wave four with wave c rally in view to complete wave four at higher levels.
So if USD/CNH is really going to see more gains (short-erm only), then metals, Aussie and S&P 500 can be pulled lower. For stable risk-on, I really want to see progression down into wave five on USD/CNH, which is clearly not happening yet. So technically speaking, it looks like the dollar can see a further rally, in line with USDCNH.
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