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The US Dollar is taking a breather this morning after rallying for four consecutive days, with the Index running into off of the mid-January and early-February swing highs. The January minutes made clear policymakers are toying with the idea of four rate hikes in 2018, although they would only occur at a 'gradual pace. Rates markets are currently pricing in a 100% chance of a 25-bps hike next month. Elsewhere, the has shaken off its earlier losses following the release of the ECB meeting minutes at 7:30 EST/12:30 GMT. ECB policymakers are toeing the line between looking to winddown their stimulus program without sparking another sharp upswing in the trade-weighted Euro exchange rate. Coming into today, had shed -1.8% since the market closed last Thursday.
: Thursday, February 22, 2018 North American Releases
The North American economic calendar is saturated today thanks to the US holiday on Monday, which pushed back the release of the weekly inventory data until today. Yet despite the well-stocked calendar, none of the events carry a ‘high' importance tag on the DailyFX Economic Calendar, and therefore, expectations for a significant move around any data are low. Traders should keep an eye on the multiple Fed speakers today to see how their views have evolved relative to the benchmark established yesterday in the January FOMC meeting minutes.
: Thursday, February 22, 2018
IG Client Sentiment Index Chart of the Day:
GBPUSD: Retail trader data shows 49.6% of traders are net-long with the ratio of traders short to long at 1.02 to 1. In fact, traders have remained net-short since Feb 13 when GBPUSD traded near 1.38838; price has moved 0.4% higher since then. The number of traders net-long is 3.5% higher than yesterday and 3.9% higher from last week, while the number of traders net-short is 4.9% lower than yesterday and 2.5% lower from last week.
We typically take a contrarian view to crowd sentiment, and the fact traders are net-short suggests GBPUSD prices may continue to rise. Yet traders are less net-short than yesterday and compared with last week. Recent changes in sentiment warn that the current GBPUSD price trend may soon reverse lower despite the fact traders remain net-short.
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by Shaun Murison, CFTe, Technical Strategist by Christopher Vecchio, CFA, Senior Currency Strategist by Martin Essex, MSTA, Analyst and Editor by Martin Essex, MSTA, Analyst and Editor by Paul Robinson, Market Analyst The DailyFX US AM Digest is published every day before the US cash equity open - you can to receive this report in your inbox every day.
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