The pair could pullback with the FED results coming up later today.
I assume the BOE will put the rates up tomorrow and that they will be relatively hawkish.
The pair have reached the 50% Fib retracement level from the 1.43 high to the 1.16 low.
Although we will probably see it retracing to 1.26 later in the year the probability for a correction up to 1.37 could ...
WEEKLY & 4 HOUR VIEW.
If the count is correct the next wave down should be a 3 of 3 which is normally a very aggressive and impulsive move.
Count accuracy or not the pair should go test previous low and there is a high probability of putting in a new low around R10.8 - R11.15
The week ahead will be important with 3 major central banks meeting with rate decisions and press conferences
The meetings are as follows:
- BOJ - 31 Jul - USDJPY to strengthen post the meeting
- 1 Aug - FMOC/FED - DXY to strengthen leading into the meeting
- 2 Aug - BOE. For me personally this is the key event in the week. If the BOE put interest rates up ...
The week ahead will be important with 3 major central banks meeting with rate decisions and press conferences , 70% of the time gold runs up post FED meetings.
DXY might strengthen leading into the FED meeting and then drop.
The meetings are as follows:
- BOJ - 31 Jul - Yen to strengthen post the meeting
- 1 Aug - FMOC/FED 1 Aug - DXY to strengthen leading into ...
an impulsive break above 1272 is required to bolster this view.
next key level that would boost this view is a break and close above 1309
A daily close above 1322 should confirm this view with a target between 1390 & 1433
Below is a post I did indicating that gold could correct to the mid Dec 2017 levels as most major currencies did.
We have reached those ...
If you believe the dollar will start a retrace now or even head for a new low below 88.25 then the south African rand could provide a great way to short the dollar.
I also believe that emerging markets are oversold and will provide great opportunities for the big boys to start climbing in now for good returns in the next 3 to 6 months.
The wave counts I have ...
With the breakdown last year the dollar traded back in the channel that started 2008
It tested it in sept/oct last year and is busy testing a break-up again.
Which will it be?
My personal view is that it will retrace from these levels and it is to be seen if it will go test the lows
Consider the following and how/if it will impact Jun month-end and the end of the quarter:
May 2018 close = 93.98
June 2017 close = 95.63
The last time the dollar index was positive YOY on a monthly close was May 2017
The last time DXY had 3 positive months, closing higher 3 months in a row was Dec 2016
The next week could prove to be important in terms of direction for the next few weeks.
The consolidation phase should come to an end soon and we could see at least a correction upwards if not the next big move up.