Kudlow comment shines spotlight on crosses
President Donald Trump's newly-appointed economic advisor Larry Kudlow stated yesterday that he believes "A great country needs a strong currency", in a slightly more on-message comment than Steve Mnuchin’s January comment that he was unconcerned by dollar weakness, only to have to embarrassingly backtrack a day later. Today the greenback is looking good against CHF, AUD & CAD, as well as Bitcoin (which has its own problems), but putting in a slightly less convincing performance against the heavyweights such as Cable, Yen & Euro. Smart traders will be quick to see the benefits of trading the crosses here and building long positions in the aforementioned heavyweights at the expense of the 2nd XI. GBPCAD has been in a pretty solid uptrend for 6 months now, and there is nothing about the daily chart pattern that suggests an end is in sight. However, where a market is long there is always potential for a shakeout so keep some capital in reserve to take advantage of sellers whose nerve has given way.