USD: I’m still clinging to the contrarian view

Nothing has changed compared to yesterday morning with all of the major USD pairs still well inside their short-term ranges. Fed Chair Yellen gave no indication of any rate-hike timing and USD/JPY was the most affected, giving back the almost 100 pip gain it had made during the day.

EUR/USD technical support near 1.1300 held for now but the bounces are pretty anaemic. AUD/USD broke below short-term support at .7750 but immediately bounced. USD/CAD was also influenced by the Poloz press conference and is currently trading at lows for the day.

Cable is giving me the strongest hint that the market isn’t totally comfortable with its long USD positions, so I prefer to play the contrarian in expectation that we could see a test of big USD support levels at 1.1500 in EUR/USD and 116.00 in USD/JPY.