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HomeFXDollar Drops As Inflation Runs Hot

Dollar Drops As Inflation Runs Hot

STATE OF THE MARKETS

Dollar drops as inflation runs hot. The US Dollar (DXY) dropped to the 95 handle after reports of higher than expected inflation, while major stock averages managed to eke small gains. Dow (+0.11%), S&P (+0.28%) and Nasdaq (+0.23%) closed in green, though the small cap Russell (-0.82%) fell lower. The 30Y yields climbed back to 2.10%, while the 10Y to 1.75% and the shorter 2Y to 0.93% as investors expect higher rates from the Feds soon.

In the commodities market, crude continues its upward trajectory to $82.45/bl as EIA reports show higher consumptions with the bigger inventories drop. Higher inflation fixed gold higher to past $1,825.70/oz while iron ore past $128.60/tn.

In the FX space, King Dollar was dumped across the board as investors and short term traders ran for higher beta Aussie, Kiwi and Loonie. On Thursday, markets look forward to seeing the latest earnings report from Taiwan Semiconductor (TSM), Delta Airlines (DAL) and Washington Federal (WAFD) as well as unemployment claims and producer price index to gauge the state of the US economy.


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G8 CURRENCIES SENTIMENTS

ST AUD NZD CHF CAD EUR GBP JPY USD ST
MT CAD EUR JPY GBP NZD AUD CHF USD MT
LT GBP AUD CAD EUR CHF NZD USD JPY LT
** ST refers to Short-Term daily turnover, MT is Medium Term weekly 
and LT refers to Long-Term monthly turnover.


WALL ST MOST ACTIVE

TICKER LAST PRICE

% CHANGE

VOLUME 90 DAYS AVG
SQQQ 6.34 – 1.40 234,013.1K 135,630.9K
F 24.47 + 0.49 104,050.0K 92,149.7K
ZNGA 9.15 + 3.39 92,962.5K 26,236.2K
AAPL 175.53 + 0.26 74,805.1K 89,036.3K
AMD 137.47 + 0.12 69,669.6K 52,868.2K
TQQQ 152.68 + 1.14 69,185.6K 45,271.6K
SPY 471.02 + 0.27 67,605.4K 78,228.3K
EEM 50.85 + 1.66 56,449.1K 39,515.8K
QQQ 387.35 + 0.40 54,576.4K 48,797.0K
NIO 31.68 + 5.53 54,271.7K 43,065.8K
** % Change here refer to price


WALL ST TOP FLOWS

TICKER LAST PRICE

VOLUME

% CHANGE FUNDS FLOW $
TSLA 1,106.22 27,913.0K + 8.07 30,877.9M
AAPL 175.53 74,805.1K – 21.93 13,130.5M
MSFT 318.27 34,372.2K + 17.99 10,939.6M
NVDA 279.99 38,341.3K – 17.13 10,735.2M
AMD 137.47 69,669.6K + 16.12 9,577.5M
AMZN 3,304.14 2,501.4K – 13.77 8,265.0M
FB 333.26 14,104.8K – 23.72 4,700.6M
GOOGL 2,828.61 1,305.6K – 12.02 3,693.0M
GOOG 2,832.96 1,182.0K – 0.84 3,348.6M
PYPL 187.20 13,588.8K + 17.24 2,543.8M
** % change here refers to volume


TOP 5 BLOCK ORDERS

SYMBOL PRICE TYPE R/VOL FUNDS FLOW $
FCX 45.15 equities 82.0M 3,702.3M
HTA 32.89 equites 37.0M 1,216.9M
ROKU 177.44 equities 12.1M 2,147.0M
RY 131.15 FX futures/EURJPY 720 82.3M
CL 68.50 – 82.95 crude oil futures 4,641 318.9M


OUR PICK – EUR/JPY

We stay put. Seeing three days in a row of EUR/JPY trades in total of over $200m, we decided to stick with these shorts and re-enter if stop loss was filled. With Japanese tax seasons coming soon, we expect Yen to gain strength in the weeks to come. May use open TP on partial orders to maximize gains. However, any close above the ¥131.50 on the daily would negate the bearish scenario.

HORIZON STRATEGY SL TP1 TP2
Short-Term Sell 131.50 130.30 129.80
Medium-Term Sell 131.50 129.80 129.10
Long-Term Flat

 

Risk Disclaimer:

This article is for general information purpose only. It is not an investment advice or a solicitation to buy or sell any securities/oz. Opinions expressed are of the authors and not necessarily of MFM Securities Limited or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds.

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