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Could be a day of struggle for the USD. Dollar index (daily) has bounced off solid support and now trying for a decending triangle breakout and move through 9500.

 



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I don't follow DX, is that the USD being bullish the last 2 days and seeking to break out of the Triangle to continue bullish run?  Is it vs a basket of currencies?

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I wouldn't trade it myself but it's value is as an indicator as to the current strength or weakness of the USD against, yes, a basket of currencies. As per all charts it follows the same basic rules and exhibits the same interconnectedness suggesting a difficult day today in it's attempt to breakout. The daily chart shows the USD has been ranging since May 2015 between 10000 and the 9300 zone which it recently bounced off adding weight to the idea of a change to bullish bias.

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Ok worth watching then but as you say not for trading, too many variables, better to stick with the 1-2-1 crosses.

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Very interesting, I took a closer look at the DX charts and it confirms for me my USD bullish stance.

 

The weekly chart depicts either an A-B-C or 1-3 (not yet complete).  Personally I favour the A-B-C scenario.

 

Looking at the Daily is where things get interesting.  In EW parlance the market has traced a near textbook complex wave 4 pattern with a break of the upper Triangle shape (very common to get such a Triangle in complex wave 4s) and a kiss back just now in the descending Triangle Caseynotes pointed out.  A higher high was not made in Dec 15 (although there is an argument for a double top I guess).  There was no Neg Mom Div at the Mar 15 turn (Pink 3) but there is a Pos Mom Div now supported by Stochastic and RSI movements.  All in all this suggest to me a strong Wave 3 leg up on the USD, which supports my views on the EURUSD and GBPUSD crosses.

 

 

I did expect some congestion and retrace on the FX crosses sometime soon and maybe this is coincidental with the Triangle resistance.  

All we need now is a confirmed break of Caseynotes Triangle!

 

 

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Like the patented  triangle! as an indicator - I watched Josh on IGTV at 10:30 he was talking to possible USD bullishness along same lines. The spread is 5 points - as you say bit much.  The EURUSD is working for me from yesterday and I'd add Short on GBPUSD if Dollar basket indicated.   C

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I wouldn't use DX signals to enter an FX cross trade, it is of course possible for the DX to go up but, say, GBP to strengthen temporarily in the shorrt term.  I'd just use DX to gauge general USD strength for the medium term and trade the individual crosses according to the signals you get on their own charts.

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The DX chart got my attention on Tuesday as I posted it on cable conundrum thread, it was clearly spluttering on range support looking to change direction and then had a strong day yesterday.

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I'm lovin this Dollar basket, thanks for that Caseynotes, make my analysis of USD much more comprehensive.

 

On the hourly this one has bounced back off the upper tramline again.  I think it needs to put in a slightly lower low to make an A-B-C pattern to the W4.  It looks like it should do this somewhere between Fib38 and 50 (lines of resistance - green - showing congestion zone with recent price action).

 

The key with this set up is a break of the upper tramline.  As this is all part of a larger wave 1 I might expect a break and kiss back on the tram line before a major rally.  This ties with my analysis on EURUSD and GBPUSD, where I am forecasting the completion of a wave1 down, retrace and then strong drop.  Also perhaps with USDJPY: W2 or WB retrace followed by a rally!

 

It certainly looks as if the main currency markets are coming out of a trading range (or complex retrace) and beginning to surge.  Obviously USD vs AUD/CAD/JPY has been in a trend but is that all set to reverse/retrace?  Looks like it to me, any thoughts?

 

 

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Yes it is useful, and highlights the interconnectedness of it all, I agree with your overall analysis, but everything seems to be held up just waiting for the break. Eurodollar just smashed the high of the day by 10 pip but obviously got an attack of vertigo and has had to come back and have a ly down. 

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Yep, Doha; plus Oil, Stocks and commodities on a charge has impacted USD as well as all the noise around the Fed's plans or not re interest rate rises.  All have gone too high too fast in my view and at a minimum a retrace is due.  Doha I am predicting as another wash out, though I'm sure they will try to talk it up.  And I am predicting (via my crystal ball...) that there will be an interest rate indicated for the Summer by the Fed.  Sell in May and go away?  Hmm...

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DX is into the congestion zone I am forecasting to produce a bounce and so far it has bounced off the Fib 38%.  Similar retrace rally positions are evident to me on GBP and EUR, although there look like wave 4s of an initial wave 1 to me and therefore not a trade I would take.  I'll wait for the W1 completion and retrace back from that before seeking another trade but so far it is all going to forecast.  I also wonder whether a bounce in the USD could coincide with a drop in stocks and commodities as part of a flight to safety and cashing in profits?  Oil and Copper are down nicely at present and on the way to carving a small 1-5 down. 

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This is an interesting chart from the COT report April 12, I hadn't realised net dollar longs have almost been wiped out, not least because expectations of a rate hike have receded presumably, JPY becoming the currency of choice for safety. Which seems odd given their problems, but I suppose a hedge fund can't just stick it under the mattress.

 

A report of the report here.

https://www.tradingfloor.com/posts/cot-bullish-imm-yen-bets-hit-new-record-7472506

 



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Stock markets have opened very strong, with strong Us Market future also but can it last?  Precious metals are also strongly up and now it looks like the is finding its mojo USD.  I have a turn at the Fib 62% with Pos mom Div and Stochastic/RSI support for a rally.  Key will be a break of the Triangle upper line (slightly differently drawn from previous).

 

US Dollar Basket Hrly190416_A.png 

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It is an interesting one and the pressure must be building. Either scenario is possible, the bears go for a stop run at the range bottom 9300 - 9350 or the bulls make a move for the oblique stops just above the upper triangle line. One to watch.

 



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Another down day for the USD? Will we see continuation down for the dollar toward the 12 month range bottom and the recent decending triangle lower level? Daily and hourly chart.

 



 



 

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Another leg down (up on GBP and USD) is not out of the question.  DX has hit the Fib 76% almost exactly and rebounded but not with Pos Mom Div yet.  Similar set ups can be seen on EURUSD and GBPUSD hitting 62% and 88% respectively, although in the case of GBP there is an alternative Fib drawing point, which needs to be watched as a set up.

 

If the bigger picture trend is now down then Shorting at this level is a decent risk in my view, I'd be placing stops just beyond the next level down (the Large Triangle line (blue) for a kiss in the case of the DX, though I don't trade it).  Otherwise wait and see whether we get another leg down or move up to break the DX upper small triangle line (Pink), at which point I would expect it to roar away up.

 

In stock indices I am expecting a small retrace and then a drop away (this could coincide with something similar on USD...

 



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Technical double bottom on the DX with Strong Pos Mom Div.  False dawn or the real thing, I guess we will find out when the US stock markets open up but there are strong signs of turns on the major pairs with the USD (EUR,GBP,CAD,AUD)

 



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Yes, I was watching that. The first hour bar of the session is often significant in pointing the way. (8am & 1pm). Will continue to watch with interest.

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The eurodollar bulls are fighting like mad to get price back in that 24hr range, the bottom of which is just below 11350. On the 1000 tick chart the bars were averaging about 10 min each all morning, now they are averaging 2 min. 

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That drop in the Euro was a tad quick, is it news related? I couldn't find anything.

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Possibly pre ECB rate decision jitters but as I've said before the market does what it wants and I think this is just the normal Bear market retrace turning point.  Aussie moving down now too and I expect to see GBP resume its bear run soon as well.  USD up v CAD would then clinch it for me.

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Amidist all the hurly burly of Oil and Oil related movements it is easy to loose sight of other markets.  The USD has been quietly staging itself for a rally in my opinion and now I have just seen a classic EW turn signal (rally in this case).  On the 15min chart I have a clean 1-5 up followed by an A-B-C down to a small wave 2 (i.e. higher low) and then a strong bounce away up.

 

Next stop that pesky Triangle upper line (Pink).  If that is broken this could really fly.

 

PS: I don't trade the DX but I'm seeing good turns on several USD crosses and what could a USD rally mean for Stocks and commodities...?

 



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Today's 8am opening 1 hour bar is looking bullish having reached down to tap and bounce off the 20 ema, but has resistance immediately above (descending triangle upper line).

 

An indication of morning session dollar strength?

 



 

 

 

 

 

 

 

 

 

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Dunno about morning session vs anything else but this area is critical for the medium term.  After yesterday's rally you'd expect a retrace and we have had it (although it may not yet be over of course...).  Either way a strong break above the Triangle line is a bullish event.  A trade Long just above the line (above the next previous high at least) could be a good trade or wait for the move and next retrace dip.

 

It's all about the ECB today really.  The EUR makes up over half of the DX basket so the EURUSD cross is the one to watch here.  As we near the ECB rate announcement and the subsequent con call (these days it seems more important than the actual info release - what a World we live in!!!).  I remain Bullish on the USD but you have to protect against the kind of volatility we have seen in recent times around central banker emissions...  Having said that there is also opportunity.

 

If the DX remains around the Triangle area all morning and is still there when the ECB pronounces then a Stop in Long some way above to catch any strong move is a decent play (opposite for EURUSD).  If the ECB sparks a move the other way I'll wait it out to see if it is a natural retrace and sell (EURUSD) the spike).

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What do you mean "central banker emissions"? Are you talking about some kind of smelly effluence?

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I am!  That's all that is coming out from them these days.

 

BTW, with big bank earnings well down, due in a large part to rock bottom interest rates, and with central bankers being so tight with the big banks in the US how long can it be before the Fed actually puts in their next rate rise?  Is this behind the recent signs of buoyancy in the USD?

 

When you have the German Finance minister calling the head of the ECB out over his policies that isn't nothing either! 

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