Likewise, the EURUSD opening price gap have justified our call dated Aug 12, which served to be an 'Exhaustion Gap' but was able to re-establish a 2nd lower price at 1.1300 that triggered a greater snap pullback currently trading at 1.1525 levels to this writing. Well aligned with the DXY price decline at 95.50 in Asia session.
Tactical chart technicians who have identified the price reversal in the making then, were defined with a 'morning & evening star' formation pattern on both the Euro & DXY signaling a probable market directional change. Swing / Short Term traders out for a sizeable triple digit pip change would have taken this market call / trade setup.
Other than our technical take on the USD Index in comparison with the Bloomberg USD index #BBDXY, the 'alternating market shift' were anticipated due to other influencing factors. One market driver that would not be discounted was the fact that the 10 year yield on Treasuries have moved to the 2.83% when compared with the 2 year note is now lower to a 23 basis point differential. Thus a signal of a slowing economy yet contradicted well with higher price movement on #equities would have to be appreciated.
For now, these market conditions would serve as the backdrop for the USD and equity indices theme which will remain until such time a fresh catalyst would emerge.
Related Information:
As mentioned, the 'Narrative Information' continues and so does market prices reflects these dominant sentiments from last week's price action. Asia to European sessions would likewise reflect spill over sentiments ahead of the US session.
ReplyDeleteFrom the Opening Gap and market call for the EURO at 1.1380 with a low at 1.1301 was indeed an exhaustion gap. Currently the price levels at 1.1626 would have provided swing traders a considerable over 300 pips move for the taking.
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