Jump to content

US Dollar index - Fed rate decision

Recommended Posts

Are we about to get a confirmed breakout of the 1 hour chart channel?  I have a turn just inside my Daily chart resistance zone for a wave 1 termination (see previous post above).  I have NMD and a strong EWT wave count set up and now the beginnings of a channel breakout downward.  Coincides with reverse set up on GBP and EUR (naturally) but also AUD, which is not part of the basket.  Gold/Silver are at potential turning point as well, providing correlations.

Trading strategy (on EURUSD and GBPUD and SIlver):

  1. Trade Long on breakout of the respective channels/triangles with stops below recent lows and/or key support turning zones, whichever is lower).
  2. Move stops to next low (but remaining below the channel breakout zones (and lines) until the rally is away (i.e. after a suitable 1-2 retrace and rally) then move stops to break even.
  3. Consider adding Longs on the 1-2 retrace and rally to pyramid the move but not too much as it is counter trend
  4. Warning: this is a counter trend rally (except for Silver!) so caution is advised as fast reversal is a risk (hence the focus on stop approach)

One to watch.

DX-1-hour_131118.thumb.png.c8b949fce6d62dda9b4d1836bc4a0e06.png

Share this post


Link to post

I'm seeing USD range bound ST and expecting a short term rally before a medium term bearish move, with a break through support.  I see similar on EURUSD and Silver/Gold.  Stocks have been a bit depressed this morning, ironic really that the Europeans were so bullish the past few days and just when the US large caps join they do an about turn...  Could we get stocks weakness and corresponding USD strength and then an opposite turn on both?  Not this could also happen with USD just breaking through support, doesn't have to do another run up... 

DX-1-hour_161118.thumb.png.3ec2f5941cb3d9daf727a8e67c1e1dc2.png

 

Share this post


Link to post

DX has arrived at a key moment having moved all the way to the Fib 88%.  I have noticed of late that retrace moves are hitting this level and even double bottoms/tops more frequently these days.  Such volatility is indicative of major trend changes to me as Bulls and Bears slug it out but which group will be dominant this time..?

For USD pairs a turn here is highly indicative of a significant retrace to come prior to USD resuming its major trend rally.  All markets go in waves, whether or not you subscribe to Elliot Wave Theory this up/down motion is easy to prove, just look at a price chart.  So I am expecting USD to retrace prior to a major rally phase.  Could be now, could be it needs another leg up before this happens.  Could align to a Santa Claus rally on stocks.  Could align to dovish showing from the Fed on interest rates, could align to US NFP expectations or actual data that would suggest the Fed needs to go dovish.  Who knows.  I don't really care at this point, I just look at the price action and if I see it turning at an important support/resistance zone I go with that.  Let's see what happens next...

From a technical perspective on the chart below:

  • Big picture charts (previously posted on this thread) support a long term rally but we need a Wave 1-2 retrace first
  • Turning at the Fib 88% as per assessment above
  • NMD plus same on RSI and Stochastic
  • EWT A-B-C form with 1-5 completing on the Wave C

Trading strategy:

  1. Look for ending channel breakouts on key USD pairs to get long/short (opposite USD)
  2. Look for supporting support/resistance zone turns and supporting momentum divergence
  3. EURUSD and GBPUSD are showing a couple of good set ups.

DX-1-hour_281118.thumb.png.161466ab110fa50b1c5d421dcb461105.png

  • Like 1

Share this post


Link to post

After a little retrace action USD bearish phase has finally go going, and all related pairs accordingly.  I am expecting this to last for a while but it is (in my view) a counter trend rally so I expect the USD Bull to kick in when the markets realise that the game is up for stocks.  Figure we have while yet before that happens though...

DX-Daily_041218.thumb.png.70bc4baaf0ed4c46a9822070f414ba0e.pngDX-1-hour_041218.thumb.png.4236228d3c74acc7d3c25cd54d9109da.png

Share this post


Link to post

USD rallied hard, I guess off the back of stocks weakness but now turning back down, which could be a reassertion of declining T-bond yields drag (down to 2.91 from 3.24 high at the beginning of November (10 year bond yield = real interest rates, like mortgage rates etc).  Whatever the reasons DX and associated pairs have all closed recent gaps and look to be turning again into a period of USD bearishness.  This could be a catalyst for Gold/Silver also.

DX-1-hour_051218.thumb.png.035d299d858fc4fd9af3158ca4103597.png

Share this post


Link to post

Having spend the past few months waiting for a USD Bearish retrace it looks like we may be near significant overhead resistance on DX.  There is still a bit to go, which looks to EUR and Yen as key drivers with some support from CAD and recently CHF (as Gold goes into a Bearish move perhaps...).  I see further advances for USDJPY and EURUSD should retest the Fib 76/78% area of its 1hour chart (the breakout of the Daily chart Triangle zone.  GBPUSD however could easily rally from here as an outlier.

Regardless of the whys and wherefores DX seems to have another leg up in it before any significant bearish retrace.  If Treasury Yields continue to fall off and if the Fed gets dovish again in the face of stalling economic data and struggling stocks then USD could easily reverse, at least until the market realises the game is up for the global economy and USD becomes a safe haven.

DX-Daily_121218.thumb.png.b75a73575c132fba1228039f7da415d6.png

 

Share this post


Link to post
On ‎30‎/‎10‎/‎2018 at 11:08, elle said:

unfilled gaps above ?

Capture dxy.PNG

 

Capture usd.PNG

Share this post


Link to post

Join the conversation

You can post now and register later. If you have an account, sign in now to post with your account.
Note: Your post will require moderator approval before it will be visible.

Guest
You are posting as a guest. If you have an account, please sign in.
Reply to this topic...

×   Pasted as rich text.   Paste as plain text instead

  Only 75 emoji are allowed.

×   Your link has been automatically embedded.   Display as a link instead

×   Your previous content has been restored.   Clear editor

×   You cannot paste images directly. Upload or insert images from URL.


  • Our picks

    • Something Interesting
      "USDCNH is flying up to key resistance could mean Govt interventions coming or are they going to let it go through 70000?"
        • Like
      • 4 replies
    • Customise Stochastic and KDJ indicators on charts
      On the back of recent client feedback you can now customise the Stochastic and KDJ indicator levels on IG charts.
      • 0 replies
    • Stock markets continue to recover: APAC brief 17 May
      Stock markets continue to recover: Global stocks have maintained their bounce. It’s looking more like a market that is searching for it’s next high now, as price action, from a technical perspective, suggests the recent wave-lower is over. Hence, from here, considering trade-war risks, and therefore anxiety in the market, remains high, the matter becomes whether stock indices are preparing to pop in a new higher-high, or whether what we will see is a new lower-high. The result of that simple binary will inform market participants what the broader trend is in the market: are we still trending higher, or are we seeing the start of a trend reversal?

      The litmus test to come: This commentary pertains primarily to the S&P500, which has been the bellwether for global equities, recently. But it could equally be said of the ASX200, too, which demonstrated its resilience yesterday. Just sticking to the S&P500, the price set-up offers some potentially interesting insights about the world, in the weeks to come. Another high for US stocks is another record high and a clear continuation of that market’s bull run – defying, really, what is a deteriorating global backdrop. If this fails to occur, then talk will certainly emerge whether stocks are beginning a prolonged period of weakness, in line with clearly softer fundamentals.
      • 0 replies
    • Post in Relative Rotational Graphs
      Hi folks, you may have seen the 'announcement' on Community, but at 10:30 today we'll have Julius de Kempenear, founder of Relative Rotation Graphs (RRGs) discussing GBP and how it is trading among its peers, as well as the future prospects of the FTSE 100. We'll be discussing the sectors on the move and how RRG’s try to identify a trend.
        • Great!
        • Like
    • Post in Cryptocurrencies - Asset Class
      "I'm a Bitcoin/crypto skeptic, one of these "very people" you talk about" - where do you fall on the BTC spectrum? Join the debate!
  • Member Statistics

    • Total Topics
      6,717
    • Total Posts
      30,792
    • Total Members
      40,683
    Newest Member
    sadafco
    Joined 19/05/19 10:07
  • Posts

    • The exit point set represents the bottom of the channel and a clear support level, this is how to maximise profit. There are only three potential exit points for a trend follower. 1. the stop is hit. 2. the trend is broken. 3. the channel is hit. If you wait for the trend to break you will lose around half your profit, Sell High Buy Low in a downtrend. It is also a myth that you only trade with the channel, in a clear zigzag trend you could buy the lower channel because in both trades the entry point offers very low risk. The $1249 level is not an opinion just a projected point on the channel. I have no idea how high or low Gold or Crypto or any other instrument will go, I just follow the charts.
    • @Foxy, Thank you. Spot on. I totally agree that the trend is 'short' and the current trade is 'short', full stop. That is not up for debate in my opinion. However, I appreciate that lots of other traders on IG Community follow many different trading styles and philosophies and not just trend following. Just because I do does not make it right for everyone else.  This thread is relating to potential long gold trades. So to open up a discussion I have merely 'dart chucked' a few trading suggestions. 😂🎯 Whether the darts have hit their intended spots or have gone off the board we shall find out very soon.  The problem is that there are hardly if any trend followers who make themselves known on the IG Community so my audience for this thread are not really trend followers. Your expectation for trend followers is right. They would already be short and would only exit on any trend reversal.  However, let me ask you a question. If the price of Gold went down to around $1270 levels and held and did not breach below then do you think that level would provide strong support for Gold and enough for a potential trend reversal? I personally do not like setting exit targets. I notice you set $1249.00 as a target but if your short trade got to this level then what? Does your stop loss execute and you are out? If this is the case, what if the price continues going down? If in profit, I tend to switch to a trailing stop. If the Gold price goes anywhere near $1249 then for me that is a very bearish downward move for Gold in my opinion. I would be expecting stocks and crypto to be storming upwards in this same time period with RISK ON trading decisions being made.  Thank you very much for your contribution. It is very much appreciated and for the record I agree with your post. 
    • If 20 < 50 SMA and the Parabolic agrees, then it might be time to short S&P 500 soon.  
    • Haha, I will belittle myself constantly so that others don't have to. 
    • Not to me ... I see no difference between this kind of instrument and online gambling/casino/poker.  But at least the latter have some entertainment value. This kind of stuff is a million miles away from investing and it should be illegal for providers to use terms like 'trade' in relation to them.  It should be PLACE YOUR BETS.
×
×