EFS-The US data is mixed, with the US dollar fluctuating and rising

Yesterday morning, US President Trump delivered a speech in Congress, which was consistent with market expectations and proposed an increase1In terms of trillions of dollars invested in infrastructure construction, the direction of fiscal stimulus is firmly established, while in terms of taxation, more attention is paid to tax reduction for enterprises and the middle class, while the issue of border taxes is relatively weakened. The focus is on the reaction during the speech, with a lively scene and multiple large-scale stands and applause. The latest polls also show that his support rate has increased, and even democratic parties have eased their attitude towards him. In this atmosphere, it is conducive to the approval of subsequent proposals. Therefore, it was expected that there may be obstacles in tax reduction. Currently, the situation seems to have eased, and the implementation of policies will be smoother than previously imagined.
What we are most concerned about is the impact of Trump's governance philosophy on the trend of the US dollar, which directly affectsforeign exchangeThe price trend in the market and even the commodity market. The overall direction is to support the weak US dollar policy, reduce taxes, and increase fiscal investment in infrastructure, which will lead to an increase in the US government's deficit in the later stage. For example, excessively high interest rates will increase the government's debt repayment costs. Therefore, maintaining a relatively low interest rate environment is conducive to the implementation of Trump's policy, and trade protection also requires environmental support from low exchange rates to reduce export costs. Guided by this general direction, we cannot be overly optimistic about the recent rebound of the US dollar. The recent strength of the US dollar is mainly due to3The expected increase in interest rates at the Federal Reserve meeting in the month has led to an increase in expectations, but since then, the stimulus effect of Yellen's speech and the performance of inflation data have shown that the US dollar has not emerged from its overly strong performance, which is still the view we previously supported. Every positive news and event for the US dollar is an opportunity for medium - and long-term allocation of funds to adjust positions. This time3The expected impact of monthly interest rate hikes should also be no exception.

Returning to yesterday's data analysis, the US side was the first to announce yesterday eveningPCEThe price index data is not as optimistic as expected. Although it is better than the previous value, it is lower than expected. At the same time, the monthly personal expenditure rate data released has decreased, which has led toUSD IndexA brief decline. Subsequently, the United StatesISMmanufacturingPMIThe rising data saved the US dollar, causing a reverse rally and ultimately leading to a strong closing. Mainly the data3The impact of the expected interest rate hike at the monthly interest rate meeting will still have some impact on the short-term market trend, but the focus in the medium to long term will still be on Trump's governance direction.

Before the release of data in the United States, the UK and the eurozonePMIThe data is not very ideal, especially for the UK, which is suppressing the already weak pound. Yesterday, as we analyzed, the pound experienced an accelerated decline trend. Due to the current fundamental constraints3The impact of the exit negotiations that will begin in the month, there is still room for short-term adjustment of the pound, but as the events become clearer, the impact will fade.

In terms of specific technical aspects,USD IndexThe daily structure chose to hit upwards yesterday, entering the upper pressure range. The short-term rebound trend may continue, with strong resistance levels above102.5Frontline, but short-term102There is also resistance, so the judgment that the US dollar will continue to fluctuate and climb at a high level in the future is maintained, while the trend in the middle and later stages is not optimistic. This operation requires patience to wait for the US dollar to rebound before participating.

The daily structure of the euro against the US dollar continued to decline yesterday, testing the low point ahead. It remained weak in early trading today, and the overall trend continued to be biased towards adjustment. It did not stand before the middle track of the Bollinger Bands and maintained a weak judgment. Today we can try testing5Short selling on the daily moving average light position, with stop loss above the Bollinger Bands and stop loss below1.0450There is support nearby, you can choose to leave.

The daily structure of GBP/USD proposed yesterday has been perfectly profitable, and the low closing pattern of yesterday also determines that the short-term downward trend is not yet over, and there is still an opportunity for inertial decline. Today, we can test the upper limit1.2340Entering the resistance level to short,1.2380Stop loss, below1.2140Depart nearby.

The daily structure of the US dollar against the Japanese yen is currently rebounding at a low level through platform consolidation,115There is strong resistance and the market is still looking for a decline in the future, so short selling can be done near this position. Specifically114.9Short selling,115.5Stop loss, no stop profit can be temporarily set below.

The weekly structure of the US dollar against the Canadian dollar still rebounds strongly, and it is currently not suitable for short selling operations, and the large structure previously judged has not been determined yetcThe wave failed to fall, so you can temporarily watch and wait for it to break through the front line1.3It is reasonable to chase short at the low point of an integer, and not enter the market before breaking through.

After a deep decline in the daily structure of the New York dollar against the US dollar in early trading yesterday, there was buying intervention at a low level. Currently, there is a possibility of the short-term structure coming to an end. Therefore, previous short orders have left the market or are waiting to stand up5Departure from daily moving average. The rapid recovery of this variety after yesterday's decline has a longer downward shadow, and there is a possibility of a short-term rebound. Therefore, it is recommended to make a safer exit with short orders.

EFS   Analyst: Chen Yunbo