Friends, As you know we have seen on Thursday and Friday sessions USD made a significant reversal and it looks like USD is going to fade the FED hawkish tone and ECB long-term plan is going to be in play earlier. The reversal started Since one of the chief economist on BoE voted for a rate hike on August and that cause an impulsive move on Sterling and soon EURUSD followed that move after false breaking out of the lows. A lot of people are short EURUSD and as you know my target hit on both EU and GU shorts but now I am bullish on EU.
Here is the weekly USD weighted average. See the shooting start.
As you can see bears took the control particularly as EURO retaliates tariff on US goods on Friday.
The move started from Thursday by a shooting star on Daily
USD has a hard work to break the upper band of the Flag and break through EMAs and if it does then USD will be bearish for long time. But for now it is just a pullback or retracement. We need to exit EURUSD Long next week if we see a sign of bounce on USD. TNX also after false breaking the 2016 high is pulling back and the question is that is it making a right shoulder?
USD bonds also going to retest the highs again and we expect and opposite correlation between bonds and USD.
Finally see the DXY daily. I was expecting a major pullback on Friday but we should remember that 57% of DXY is Euro.
Have a great trading week ahead my dear friends. KHAN
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Dear Friends
Hope you have a great trading week.
CAC, DAX, STOXX 600, EUSTX 50, FTSE 100 and FTSEMIB all heading lower ranging from 0.50% to 1.6%. This means stronger Euro and Sterling for now. Here is a classic example of the wedge formation breakout for weighted average EURO. These formations normally breaks to the wrong side first to trap retailers on the wrong side of the market and then the price reverse and continues toward the original trend direction.
Do not forget that 57% of DXY is EURO.
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On weighed average EURO the ECB dovish tone has been faded as you can see below!
Next EURUSD
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Red is Average EURO, Black is Average USD.
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Starting point is ECB
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See the TNX posted above 10 days ago. Is it going to break the neckline hence fading the ECB dovish and FED hawkish tone?
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Same pattern on 30 years US Yields.
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Fresh low on DXY, Daily RSI. (see red dotted line)
RSI trend diverges the price trend
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USD weighted average
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First breakout on USD 30 Years Yields. Let's see if daily closes below the neckline. Then we have TNX to break the Neckline as shown above
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Another shooting start on the fourth attempt
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*star ;)
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USD weighted average and Emerging markets are negatively correlated
Emerging markets broke the neckline and never tested the neckline. Overall I am expecting this for EEM
But before that we need a visit to the neckline
That is what exactly we need for weighted average USD. A visit to the resistance.
Remember on Friday we had a false breakout of the highs on USD average.
@ahmedzahid2799, I am not mate but would be a good idea. Sorry for the late reply
UnknownUnicorn2012266
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where to now? 7th attempt on the way?
UnknownUnicorn2012266
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let it fall please :D
khansalarehsan
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@ntabish12, lol maybe it is going to fall
Street1975
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Maestro. What do you think about long T notes here? It feels like we have 2 short term scenarios now - either the Fed do nothing and US indices keep selling off and bonds rally ( safe haven etc) or tough man Powell chokes and admits that he'll have to be way more dovish with the world in the midst of a trade war - bonds rally. There is obviously scenario 3 where Trump backs off but that isn't going to happen until he's 'won' and that isn't happening anytime soon......
khansalarehsan
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@Street1975, Sorry for the late reply. Probably we will be having a fall in DXY ...
Are you also long on GU?