What will be the trade of the year 2017?
With being close to the end of 2016 we are looking forward to some trade ideas for the year 2017. After the “Trump Rally” the world seems to be in much better shape for now as expected. But beware of this Rally on basically nothing, apart from expectations to put money into the US economy we are staying bullish US-Dollar long term. The real problem is still the Debt Levels on a global scale which couldn’t be fixed in the last years. The only real player in the world is the US, even when Trump will increase the debt level in the US to an all time high. There is no other alternative which we highlighted in one of our former articles
The Bubble Of Your Lifetime – The Economic Crash of the Financial Markets
with this in mind and knowing that especially in China the money is leaving the country we are out and out bearish on China.
With a look on the technical details the USD/CNH has done as expected and the breakout above the mid Bollinger Bands has followed through the chart highs. We would expect any pullbacks to be held by support and stops can be placed behind 6.890. We expect the Chinese to continue to force the USD up to help there exports and in the coming months to devalue the Yuan which could see USD/CNH move up as high as the 10.00 level. Any devaluation will also trigger a move to risk off in our view as a devaluation will simply export deflation around the world and could trigger a financial crisis in the global economy.
For further background information you can find more under our friends at learncurrenytradingonline. We wish you a pleasant 2017 and good trades for the new year. Whenever you want to know more information, please follow us on twitter.