Here on the Euro Dollar we have bullish bat pattern on the Daily. Overall from a position trader stand point i would remain bearish on the Euro considering for the last few DECADES the Democratic Party here in the US has a history of having hawkish trade policy which drives the value of the dollar up and dries up liquidity in the markets for the dollar. Think of it like trying to buy a Bottle of Cocoa-Cola (KO) would you rather buy the coke for 1.00$ or 2.00$ same thing for international businesses they slow down their international trade with the US as it is too expensive, because they're having to buy 2.00$ cokes (KO) to do business with other businesses or with the US.
However, trading off the Daily timeframe this pair has roughly 200 pips to go just to fulfill the pattern requirements and then if it is a solid move PA will consolidate a bit before regrouping and heading up. I call this a Dirty Bat because we have to play with the midpoint and give it some tolerance. the mid point is a .522 which is close to the Maximum tolerance range outlined in Scott Carney's book. The orange line is a 1.618 over extension of the ABCD pattern . i would not be surprised if we see volatile PA in this area.
the Red line is the HOP level. and if PA completely violates the HOP then the pattern is invalidated.
For my Dollar Index traders, alot of us like to use the DXY as a gauge of dollar strength, but in reality if you want to know where the DXY is heading you need to pay attention to the EUR/ USD . the Euro comprises over 50% of the dollar index , followed by the Pound (GBP) at 30-ish %. Between those two royal pairs alone you will get a real good indication of where the index is heading with a massive 80% composition of the DXY . Next is the yen (JPY) , aussie dollar (AUD), the Kiwi (NZD), the CHF and the SEK . Now the DXY has formed a nice double bottom in an area of support and it is consolidating a little and having a hard time making a move. Could we see the Commercals and the Large Speculators readying to swap sides, or are we seeing a profit taking and the closure of open interest.
Either way you slice and dice it the EURO Dollar ( EUR/USD ) is one of the most important pairs to monitor in the trading world as 80% of the market liquidity is tied up in this pair alone.
Wanna gauge how strong the EURO is or potentially will become check out the DAX . The ECB is located in Germany and rightfully so, the Germans support the Euro by 80% or more in contribution, so monitoring the DAX will let us know the current state of affairs for the strongest supporter of the Euro ; therefore, will tell us the heartbeat of the EURO . And currently the DAX is pulling a S&P500 move with just an unprecedented move sky high trading at all time highs, just like us here in the States.
However, trading off the Daily timeframe this pair has roughly 200 pips to go just to fulfill the pattern requirements and then if it is a solid move PA will consolidate a bit before regrouping and heading up. I call this a Dirty Bat because we have to play with the midpoint and give it some tolerance. the mid point is a .522 which is close to the Maximum tolerance range outlined in Scott Carney's book. The orange line is a 1.618 over extension of the ABCD pattern . i would not be surprised if we see volatile PA in this area.
the Red line is the HOP level. and if PA completely violates the HOP then the pattern is invalidated.
For my Dollar Index traders, alot of us like to use the DXY as a gauge of dollar strength, but in reality if you want to know where the DXY is heading you need to pay attention to the EUR/ USD . the Euro comprises over 50% of the dollar index , followed by the Pound (GBP) at 30-ish %. Between those two royal pairs alone you will get a real good indication of where the index is heading with a massive 80% composition of the DXY . Next is the yen (JPY) , aussie dollar (AUD), the Kiwi (NZD), the CHF and the SEK . Now the DXY has formed a nice double bottom in an area of support and it is consolidating a little and having a hard time making a move. Could we see the Commercals and the Large Speculators readying to swap sides, or are we seeing a profit taking and the closure of open interest.
Either way you slice and dice it the EURO Dollar ( EUR/USD ) is one of the most important pairs to monitor in the trading world as 80% of the market liquidity is tied up in this pair alone.
Wanna gauge how strong the EURO is or potentially will become check out the DAX . The ECB is located in Germany and rightfully so, the Germans support the Euro by 80% or more in contribution, so monitoring the DAX will let us know the current state of affairs for the strongest supporter of the Euro ; therefore, will tell us the heartbeat of the EURO . And currently the DAX is pulling a S&P500 move with just an unprecedented move sky high trading at all time highs, just like us here in the States.