The USD has been getting sold off quite heavily. A recent interview with one of the world's best macro guys, Raoul Pal, suggests the US dollar is getting removed from being the world's reserve currency. He suggests there could be a basket of currencies in the future that will take the place of the USD.

His analysis is then to suggest that the US dollar will continue to get sold down with price recoveries during this transition.

You can see on the USDCHF pair that bullish divergence is starting to appear, with the market making lower lows while the stochastic is pushing slightly higher.

Overnight, the US dollar was sold off heavily, with all crosses rising accordingly.

This trade is going against the dominant trend, so is one to watch extremely closely.

I'd like to see a confirmed push higher in order to take a small potential trade on those who believe the USD is way oversold and due for a bounce.

But you should be cautious due to flying against the trend.

Bullish divergence reversal trade against the trend

Dec 16 2020

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