Last week we were talking about correlation. From my point of view its a key tool because the information comes directly from the price, not lagging indicators.
Here we see a perfect negative correlation between the EURUSD and USD index.
Right now both are facing important levels of support/resistance shown on the chart.
There's no additional information right now, only the trendline support on the EURUSD chart. Next week will be decisive. We must watch closely the price action of both charts looking for clues about the future direction of the market.
This is just an example, there many other correlations on the market that can help us to enter a trade.
Best regards.
Comments
IvanLabrie
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Indeed, a reversal should be underway, even if it's a retracement in the bigger scheme of things, it'll be a nice trade.
I didnt see your post. I agree, considering the DXY a reversal or retracement is also possible. Same idea with the USDJPY, im long now but i will watch closely the DXY price action.
IvanLabrie
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Good idea, I had a long usdjpy trade but closed in profit.
Should be an interesting Sunday open...
tradingview.com/v/xF5be9cW/tradingview.com/v/12Y06iGo/