As discussed in my previous US Dollar -0.22% Outlook idea, we would need a catalyst to send us through the major resistance area of ~95.70 the 61.8% Fibonacci retracement .
Yesterday was a quite a news day for the greenback and we got the push needed during the New York session and Fed speeches to send us through the resistance zone we've been trying to breach since August. However, it was short lived.
We have since seen the dollar take a nose dive as the Federal Reserve's Jerome Powell hinted at slowing down the pace in interest rate hikes for the greenback.
Tomorrow is no less exciting. With Non Farm Payroll and Unemployment events in the morning, we will see extreme movements, so as always, be vigilant. I will not be in the market and I advise you to do the same unless your trading plan involves high impact news events. I will be waiting for it all to play out.
Remember, when you try and predict the market, it is just the same as gambling. We want to react to the market - let it show you where it wants to go, because it always does.
What I will be watching for:
The yellow zone we are toying with right now at 95.70 is the key area at play. I will be looking for a reaction to this area in two ways.
I am looking for price action to confirm the 95.70 zone has now become support and will be looking to take longs up to the 96.00 zone. I am watching for the retest of 96.00, which will create a double top in a S/R zone. I will continue to hold until price action suggests buyers are exhausting, if buyers are not exhausted I will hold to the supply zone of 96.30+.
When the buyers do show signs of exhaustion, then I will be looking to short the market down to the key area in the orange zone of 95.00, which has major Fibonacci confluence of 50% and 38.2%. Beyond that, we have a fresh demand zone in blue, at 94.50. If we can get the push down, I will be looking for price action to confirm long positions from there.
Alternatively, we may see no further push north, and may snap below the trendline , reverting back to this 95.70 zone becoming resistance. if this happens, I will do the same as mentioned above. Look for a double top retest of the broken zone, observe price action for an entry reason, and take the market short.
Yesterday was a quite a news day for the greenback and we got the push needed during the New York session and Fed speeches to send us through the resistance zone we've been trying to breach since August. However, it was short lived.
We have since seen the dollar take a nose dive as the Federal Reserve's Jerome Powell hinted at slowing down the pace in interest rate hikes for the greenback.
Tomorrow is no less exciting. With Non Farm Payroll and Unemployment events in the morning, we will see extreme movements, so as always, be vigilant. I will not be in the market and I advise you to do the same unless your trading plan involves high impact news events. I will be waiting for it all to play out.
Remember, when you try and predict the market, it is just the same as gambling. We want to react to the market - let it show you where it wants to go, because it always does.
What I will be watching for:
The yellow zone we are toying with right now at 95.70 is the key area at play. I will be looking for a reaction to this area in two ways.
I am looking for price action to confirm the 95.70 zone has now become support and will be looking to take longs up to the 96.00 zone. I am watching for the retest of 96.00, which will create a double top in a S/R zone. I will continue to hold until price action suggests buyers are exhausting, if buyers are not exhausted I will hold to the supply zone of 96.30+.
When the buyers do show signs of exhaustion, then I will be looking to short the market down to the key area in the orange zone of 95.00, which has major Fibonacci confluence of 50% and 38.2%. Beyond that, we have a fresh demand zone in blue, at 94.50. If we can get the push down, I will be looking for price action to confirm long positions from there.
Alternatively, we may see no further push north, and may snap below the trendline , reverting back to this 95.70 zone becoming resistance. if this happens, I will do the same as mentioned above. Look for a double top retest of the broken zone, observe price action for an entry reason, and take the market short.
Trade active:
NFP/Unemplyment has sent DXY southbound to break the recent support zone. We are now coming up to retest the zone and should see dollar weakness across the board.