Will Nonfarm Payrolls Spark A Move Lower In The Dollar Index?!
Hello Traders,
I hope everybody is doing great.
After I covered the EURUSD
in the daily chart, let’s have a look at the equivalent instrument which is the DXY.
From the 2018-02-16 low to the peak of 2018-04-05 you can see clearly that the DXY has moved in a sideways to higher trend (No higher highs or lower lows). So it was just a matter of time when the consolidation breaks. Either to the upside or downside.
You can see that after the important 2017 resistance levels of around 90.99-91.31 broke higher, it accelerated in an impulse higher. That is a so-called trend acceleration cycle.
You can see that it has been trading higher in a narrow uptrend.
So what next?! Well, for me it is simple. The DXY is still in an intact downtrend, and any move higher should be taken as a correction. Markets never move in one straight line higher or lower, they correct, trend, and consolidate and so on.
With tomorrows NFPs coming up. I am expecting the DXY to get weak again. At least for a pullback lower.
The next important daily level is the resistance now acting as new support level of 90.99-91.31. Also, the DXY is currently sitting at the 61.8 Fibonacci Retracement from the decline of late 2017. It can be a possible turning point.
It can be the case that with the NFPs the DXY can spick higher to take some stops before turning lower like I drawn in the chart. Let's see.
This view will be invalid once DXY breaks 95.15 resistance.
Disclaimer: Trading is about going with the highest probability, nobody is 100% right and we need to protect ourselves in case we are wrong. That is why we need to always use a stop-loss when trading. Trade with care. This my current view, and any view present is not a trading recommendation just personal view.
I hope everybody is doing great.
After I covered the EURUSD
From the 2018-02-16 low to the peak of 2018-04-05 you can see clearly that the DXY has moved in a sideways to higher trend (No higher highs or lower lows). So it was just a matter of time when the consolidation breaks. Either to the upside or downside.
You can see that after the important 2017 resistance levels of around 90.99-91.31 broke higher, it accelerated in an impulse higher. That is a so-called trend acceleration cycle.
You can see that it has been trading higher in a narrow uptrend.
So what next?! Well, for me it is simple. The DXY is still in an intact downtrend, and any move higher should be taken as a correction. Markets never move in one straight line higher or lower, they correct, trend, and consolidate and so on.
With tomorrows NFPs coming up. I am expecting the DXY to get weak again. At least for a pullback lower.
The next important daily level is the resistance now acting as new support level of 90.99-91.31. Also, the DXY is currently sitting at the 61.8 Fibonacci Retracement from the decline of late 2017. It can be a possible turning point.
It can be the case that with the NFPs the DXY can spick higher to take some stops before turning lower like I drawn in the chart. Let's see.
This view will be invalid once DXY breaks 95.15 resistance.
Disclaimer: Trading is about going with the highest probability, nobody is 100% right and we need to protect ourselves in case we are wrong. That is why we need to always use a stop-loss when trading. Trade with care. This my current view, and any view present is not a trading recommendation just personal view.
