The USD has been in a nine (9) month stretch on the decline since marking a 103.82 basis point high at the start of the year last January. It was just the month of April that confirmed a serious turn around was in the making. Although there were already earlier signal in this March 21th chart reference that such probability weighed heavier before anyone would have noticed. Other than the fact, that a much wider range for the DXY to head south as a wider price range has formed by the 'Divergent Angle' of bar formation but often times called by it 'megaphone' shape as described on the chart below.
With that said, this stretch now carries a probable bottom range price that would essentially be considered the first line of defense at the 91.00 level for the DXY. Which in fact is still considerably higher from the USD equilibrium price level over a thirty (30) year span trading the USD index from its 1973 inception. Especially comparing with its Asian counterparts with the BLOOMBERG / JP Morgan Asian Dollar Index ADXY as a way to better understand its performance and correlation with the Asian foreign currencies.
USD: Then & Now!
USD: Then & Now!
On our last market & price call dated March 21 - 23, 2017 (Reference Info) No such confirmation existed, only with the exception that dark clouds were forming providing a negative signal of such a correction in April would occur heading towards the 2nd quarter trading cycle of the USD. Thus enabling ourselves with an ETF UDN strategy to position in the event of a serious turn around. By doing so protecting the gains made from our strategic UUP position plus a counter trade position on the USDX futures in the event of a decline.
An 'Alpha-Cross Related Trading & Investing Strategy' in place that Megatrade101 has always emphasized to our valued clientele. These are all correlated with single principle in mind in preserving and building up equity on what has been an effective strategy until today contrary to the capital investment and cost to maintain these position.
With that said, similar morning clouds that would serve as a basin for a recovery likewise may also be in the making by mid-quarter trading. As the wider range shown on this March 21, 2017 chart describes the technically 'Top Heavy Cluster Formation'. An inverse relationship can form the same case scenario for the recovery.
Although, the surrounding fundamentals lingering in the newswires where we can easily find 'Market Misdirection' occurring in between now and the first two weeks of the new month of October. where some dramatic market actions are expected. It is always good to be aware for the unexpected as placing cushion for every probability is important. Especially for a continuing market run or even a major sell-off could bring about 'uncertainty' at any given notice for market participants.
BTW, Thanks to all our valued viewers specifically from Italy, US, Germany, France, and from the UK! Much appreciation goes to the rest of the other countries that make up MegaTrade101 viewer list.
ReplyDeleteAs of Oct 27, 2017 report of the US 3.0% GDP rise the USD primary reaction to breach the 95.05/10 has been made along side the EURO immediate price reaction from the ECB holding back bond purchases have driven prices below the 1.1600 levels.
ReplyDeleteValidated as it may have been any first price reaction and break would prove to have a counter reactive move that would pullback prices thereafter. However, the first week of the new month would dictate the re-direction of sentiments into the market So far, so good and would be checking how the commitment of traders report would weigh on volumes and open interest among others.
Price check: #TSOT - On #EURUSD Vs. USD Index DXY - Price Action Speaks Better than words! Fundamentals Back up Technical. Market & Price Call VALIDATED.
ReplyDeleteLink: https://s.tradingview.com/x/DpfK5Xuz/