I would go speculatively short DXY right now, around those levels. But there's no confirmation, still shorting strength. For a better setup and risk to reward, i'd wait for the top to form and have something to work off.
You should have unrealized loss on your position now, since yesterday you said you were flat on your position. Daily chart on USD/CAD looks bad, it formed an ascending triangle, and now it breaks on upside, which means it has pretty far to go on the upside.So here is the old question: will you cut loss? Where to cut? Edit: between 5/29/2018 and 6/14/2018, USD/CAD daily chart formed the same kind of chart pattern. Check out what happened after 6/14/2018.
Not only Sep rate cut was priced in, some of other cuts by the end of year were also priced in. That means if Sep has a cut, market would not respond. If there is no cut, USD will be up huge. See below: Sep rate cut is 100% expected. https://www.cmegroup.com/trading/interest-rates/countdown-to-fomc.html Now you all see gold is up big today. While CAD is down. So for the same news, (US PMI bad number), gold responded strongly while CAD has been weak. Also I bought gold at 1544. After PMI news came out.
IMO the equities have to go somewhere from there. They either dump hard or they pump. Not to mention CNBC has been posting bearish tweets for the last few weeks, september allegedly being the worst month for stocks, a big selloff coming according to their analysts and what not... That's what i'm speculating on. Some kind of an announcement by FED or sth like that, which would propell dollar down, push equities up. Gold has already been rallying hard and i think it's already priced in and it will likely top soon, probably along with the news. I don't understand the fundamentals, i only trade the charts. I am not even convinced i know what a rate cut is. But that's what i'm seeing could happen , the way everything is looking right now...
What you speculate doesn't matter. What market expect matters. So try to understand market, and don't base your trading on what you guess. What you thinks gold is priced is completely wrong.The fact gold is up big today is the best evidence that Gold is not priced in.
Future Secretary of the Treasury: https://www.elitetrader.com/et/threads/lost-money-trading-but-now-i-owe-2million-in-tax.300825/
FWIW, this is a long term position in USDCAD. I can cover the carry on the position indefinitely in vol. I have a short touch going off on Friday at which point I will short 40MM in vanilla puts below the mkt as well. I won't update on the vol unless spot trades under 1.32 (vanilla put strike) as I'd invert. If you don't understand the above then don't bother replying as I am not inclined to wipe your drool.