DXY: A LLLC and 2 Potential Patterns ahead of the Fed & GDP

It's been a rough week for the Dollar and an expected slowdown in GDP this morning will most likely keep the ball rolling in that same direction. So SELL SELL SELL! Actually who am I kidding? I have no idea what's in store, and neither do you. By now you know how I feel about fundamentals and if you’ve consistently traded the markets over any period of time then you know that trying to guess the number is easy, but trying to guess the reaction to the number doesn’t always go the way you’d think it would. If we expect a bad number and we get it is that still bad news, or has the market already priced this number into the markets over the past few days which is why we’re seeing this decline in the first place? It turns into a chicken or the egg type conversation in my opinion. So me…I’d rather just focus on the technical!
And from a technical standpoint technical standpoint what I know is that we've been watching the Dollar Index all week in the Syndicate as it began to test a major level of support that I like to call a decision point. With our "IF/THEN" thought process loaded we were ready to react no matter what the market did at that level. Yesterday we ended up putting in a Lower Low, Lower Close (LLLC) which tells me we should continue to see some bearish movement. IF we continue bearish THEN where is our next most likely stopping point? Well we have 2 potential advanced patterns setting up. A bullish Butterfly in blue and a bullish bat pattern in yellow.

It's going to be a busy day with both the GDP release at 8:30am and the FOMC statement/ funds rate at 2pm, but if we pre-program our mind on what to look for, then when the dust settles we'll know exactly what our next move it. There will be no panic in our bones because we’ll know exactly what do look for and whether or not we should execute the trade.

Akil
www.TradeEmpowered.com