The dollar is recovering quickly, and speculative traders are urgently coming out of short positions amid rising US Treasury yields. According to the CFTC Futures Trading Commission, margin funds are cutting long positions in the euro and pound, increasing demand for the US currency. According to a number of analysts, the dollar is ready for a real rebound, on which you can make good money, and will grow for several weeks, or even months.
Is it worth opening sell positions in EURUSD and GBPUSD, and for what purposes can this be done? AMarkets experts commented on the Fortrader magazine question.
– You shouldn’t open sell positions in EURUSD and GBPUSD, the current dollar recovery looks more like a temporary phenomenon. Market participants are buying the dollar amid growing political risks in the US.
Earlier, House Speaker Nancy Pelosi said the House could take action to impeach Donald Trump this week. This raised concerns that another wave of discontent in Washington could escalate into new social protests.
On Monday, Democrats introduced a resolution calling on the Vice President to use the 25th Amendment of the U.S. Constitution to remove Trump from office. A vote on this issue will take place today.
In the event that the resolution is passed, and Pence does not remove Trump from office within 24 hours, the House of Representatives will initiate impeachment proceedings. In this scenario, the US currency will continue to recover, however, this will only last as long as the Democrats do not announce new fiscal stimulus measures in the US.
Recall that the details of the new state aid package for American households will be announced by Biden at his press conference on Thursday. Against this background, dollar sales risk resuming with the same strength. With that said, the EUR / USD and GBP / USD pairs still have the potential to move above 1.23 and 1.38, respectively.