vlad.adrian
Long

EURUSD - The end of the first dollar bull run

FX:EURUSD   Euro Fx/U.S. Dollar
930 12 12
On Monday, the 16th, I sold most of my dollar longs. The reasoning was that the Friday momentum was lost on Monday, combined with the selling climax the week before and a personal scenario that the removal of patience would be a case of buy the rumor sell the fact, which proved right. On the 18th, I have sold all my dollar longs, and shorted the dollar. What happened on the 18th, looks to me like a clear reversal and this bull run is over. Note that the dollar trend is not over, we will see this pair at parity in a few months, but for now, all the shorts need to be squeezed out of the market. In a couple of months, I will be ready to put my money back on the dollar.

On the left side, we have the weekly chart which shows climactic action. Note that march is a turnover month, and that adds volume to the huge volume bar. However, looking at the daily chart with volume , the high volume was not on the roll-over day, so the week counts as a selling climax. The Force Index is incredibly oversold, and it is getting back inside the channel.

Going on to the daily, I outlined the levels where I sold this pair, mainly because I posted lots of comments about how the dollar was bullish when everybody looked for corrections, and the replies I got were full of hate, unfortunately. Fortunately, I was right. The momentum from Friday was lost on Monday. That is a serious pattern in my book, however, without the extreme bullishness surrounding the dollar I wouldn't have taken a position. On the 18th, the FED dropped patience, as Hilsenrath told us a week before, and this was a clear buy the rumor sell the fact trade. I went long EURUSD             after the press conference.
Yesterday's rally in the dollar looks to me like amateur buying, I doubt that real money bought again. This of course, is a personal opinion, and should be taken with a pinch of salt.

I expect the dollar to correct in the coming weeks. I have no idea about the size of this correction, but personally I would like to buy it again at 1.15 on EURUSD             . I will keep a small short on the dollar, but I doubt it will be a real money maker. I have been extremely bullish on the dollar since the summer, and I have tens of charts to prove it. I am now neutral to bearish . This has been the best trade.
Vlad, any new ideas on the pair? Do you think there will a rapid decline if Greece exit happens, below 1.0?
Reply
vlad.adrian PRO MetinKadaster
I have reversed my long position more than a week ago, I am heavily short EURUSD, not very confident though. A rally like I expected when I published this chart should have happened fast, but it didn't, so I went short.
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IvanLabrie PRO vlad.adrian
This is a complex correction, a wave 4 of a large cycle, which suggests one more wave down...I have bearish targets of 1.03 and 0.80 give or take, but on a quarterly timeframe scale. It will take a while to go back down I think.
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not into currency, but my wifey keeps nagging me about not buying Euro. should i listen to her? and if she is correct what is the best way to pursue the trade? thanks for the feedback.
+1 Reply
vlad.adrian PRO www.myriss.com
Unless your wifey is a co-manager on your portofolio, there is no reason for you to listen to her. The best way to approach a euro long is enter now with a stop below the major low or below the low from 18th March.
+1 Reply
I agree vlad.
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Dollar and stocks bulls got a lot of push back! With nothing substantial coming from the bears to back up their arguments. There was such a lack evidence I started frothing at the mouth, unfortunately, and gave some of that hate back to them. Takes more out of a person than it's worth - and now I just ignore anything that isn't supported by some evidence. I prefer to stay out of the unpleasantness now. Doesn't do anyone any good.

I'd love it if we got a nice wide predictable range going on the DXY and made a lot of easy money on it until September :)
+2 Reply
Range? very posible
Predictable? not a very predictable business is it :))
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HexVex vlad.adrian
Not at all but one can live in hope :)
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So there is no parity at all :-)
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