USD Remains RESILIENT, 10 Year Bond at 2.942% RECOVERY

Post analysis dated Aug 22 through Sept 7, 2018 - USD Index - DXY resiliency have held well from August retest at 94.16 low. In fact, its gradual ascend in prices are quite orderly with HIGHER LOWS from the past 3 months; well above its average at 93.75. 

While closing at 95.33 basis pt. for the week as a result of favorable sentiments surrounding the markets including the Jobs data. The 10 year treasury yield have gained some ground back up at the levels of 2.942%. And the likelihood of a stable level is expected as it resumes a gradual rise heading forward with similar price adjustments on equities.

Reference Data: #DXY as of JUNE LOW 93.36, JULY 93.71 AUG 94.16 respectively 

NFP on Jobs were quite positive for the USD-DXY is currently at 95.20 in the US session. Accompanied by a weaker EURO that fell back to 1.1576, while GBPUSD once again got a lift from Brexit news trading at 1.2961. European majors price movements are more susceptible from EU policy makers that are fundamentally motivated. 

The EURUSD is an obvious mirror image of the USD Index as it has the largest weighted component share in the overall DXY index. From its low at 1.1301 to 1.1747 recovery period has completed its run and bound to resume its overall trend lower where a retest is expected. For as long as the USD continues to stay resilient heading towards the FED's rate hike, a declining pressure remains present. 

Likewise, we should be extra vigilant to watch for unexpected narratives that would derail equities redirection. But as a matter of market perspective, we should be able to adapt to the changing narratives at any given time. 

OPENING Price GAP on the EURUSD - A Clear Divergent Target

EURO hits its target levels at 1.1379 (Validated) as of this writing, we have indicated in this market outlook as of the Asian opening trading session Aug 13, 2018. Although, we considered this as a 'delayed price reaction' just waiting to occur. 

As the divergent trend regression between the USD Index and EURO was 'identified ahead, since last Aug 03, 2018' compared with the current market price action when the DXY was at 95.10 and the EURUSD was at 1.1660 levels respectively. With the DXY marking previous high at 96.45 ahead of the single currency last Friday. Thus giving swing / day traders ample time to take action as the signals where clearly present.

Divergent Trend: DXY & EURO Price objective

The 'OPENING Price GAP' on the EURUSD at the aforementioned price level at 1.1371/80 with a low at 1.1368 would give the market a greater probability to have a daily session relief recovery and/or a considerable pullback from market capitulation. 

As a widespread contagion of the overall bearish markets in the Asian region which includes equities can be seen across the board. Bearish sentiments from US equites decline have spilled over and would likewise remain for now until a new tide emerges. A cautious play is advised with increasing volatility in the financial markets exists! 

TSOT- Varying Factors Benefits USD Acceleration - #DXY at 96.00 Basis Point

Ripples Across Major FX Currencies 

Starting off with Federal Reserve-Chicago Charles Evans turning to a hawkish stance who is known for being a dove, is just one contributing factor for the USD lift. The Foreign exchange market have been quite busy across the board which summarizes the following market activities that actually gave the USD - DXY a push towards the 96.00 basis point levels from the 95.17.

Video Support: Transitioning USD Index As of Aug 10, 2018 

> CABLE or the Sterling Pound have continuously been dampened with a No Brexit deal while awaiting UK GDP report. GBPUSD is currently at 1.2772 way past it psychological support price at 1.2880. While the EURGBP Cross at 0.9000 have benefited from CABLE's weakness in spite of the recent daily session relief from the Euro. 

> Except EURUSD have just broken through the ground trading to this writing at 1.1455 where it's aiming at another psychological barrier support at 1.1380 which is not to be discounted as the USD gains momentum to further rise in the near term. 

> USDJPY has been aligned with a USD strength as it benefits from a safe haven status whenever turmoil in the currency market are present while trading at 110.68 from a recent high at 111.51 for the week as of Aug 10, 2018.

Click to continue for more chart details

On the CCY Corner: USD Dominates & Ripples Across the Board

The USD didn't want to be left behind from the party, as the #USD #DXY registered a rally last Friday well above the 94.48 breaking the May initial high of 94.29. It has been a gradual climb for the USD well within three (3) consecutive months until reaching its recent high at 95.13 while closing for the week at 94.87. 

A firm tone for USD sentiment remains suported by the recent figures from a stellar Retail Sales report, Low Jobless Claims & the  ECB statements maintaining low Interest Rates until 2019 while ending their Asset Purchase Program. However, the market is focused on the tensions arising from the USD / China trade war building up and other US allies that may also be affected. 

A 'tit-for-tat' is expected more between the two major economies and how these would directly and indirectly affect other countries in the emerging markets particularly in Asia. As the USD strength and interest rate hike have already dampened most global equities and currency value in the pacific region.

This resulted the EURO back down at 1.1562 a slight overshot from our 1.1580 objective, the USDCHF at 0.9988 high nearing a rewind towards it s parity levels. Meanwhile, CABLE have registered a low at 1.3210 which run short of our  objective at 1.3180 and the AUSSIE Dollar loosing more ground with a low at 0.7440 as the USD surged. 

The USDJPY have remained at their own 110.65 levels a tight alignment from its price range for the past 5 consecutive weeks. However. its price action and similar trajectory correlated with the Nikkei 225 Overlay USDJPY is well defined in the near term direction.

Last but not necessarily the least is the relative reaction that carried the USDCAD well above the 1.3200 levels; a fresh incentive that drove the USD strength from all sides of the global market. The near term incentives for the USD strength can draw similar market sentiments towards the Loonie as it projects a revisit of a higher record high after similar corrective moves are in place. 

GBPCHF Cross Rate Lift USDCHF

The Sterling / Swiss Cross rate's resiliency even after CABLE's corrective decline from missing retail sales expectations have continued to dominate well within its near term trend direction. With the GBPUSD reaching a crucial resistance levels at 1.4375/80; it had limited effects on price action as the USD index (inverse price relation) have been on a struggle to continue its consolidation well within a tight range.

In spite of this condition, the #USDCHF likewise managed to rise to a significant level as indicated on the chart above, with a probable retest at the parity level while still trading at 0.9710 to this writing. Especially coming from a well technically motivated support price range at 0.9200 - 0.9305 which may also serve as a double bottom figure so to speak.

Meanwhile, when market conditions on the European majors does not change from ECB Mario Draghi that may influence not only the #EURO; the  GBPCHF Cross currently at 1.3768, but at the rate its moving would eventually retest its initial target levels at 1.4360/80 range in the near to mid-term outlook. This could lead to a scramble between the major Cross rates once any sudden changes on the EURO occurs.

The major pair's behavioral pattern and price action are confined within a major channel higher relative to its near term lower highs nearing the parity price levels with the USD. The USD have found a catalyst for a firmer tone in the form the 10 year US Treasury yields nearing the 3% threshold. This enabled the relative rise for the DXY back to 89.95 bp as of late Thursday US session. The week's closing will provide a better market outlook moving forward

For the time being, the market's sentiments would continue its course in the FX market. However, major market participants have been carefully watching equities and commodities as oil and precious metals are gaining grounds while US equity indices are still in a roller coaster ride with prices moving in both directions.

Tail Wagging FX & Equities' In Both Directions

Follow where CONVICTION is stronger!

To no surprise, the market place have reflected price volatility as a common ground with the current  price action in the US trading session. US equities particularly with the DOW's failure to stay afloat above 25k is swaying from triple digit changes between highs and lows which comes relatively easy and see investors shifting gears or simply changing hands quickly with price action narratives.

Especially with the most recent report on the President's steel and aluminum tariff plans drew a quick rebuttal plan of action from the EU counter balance and have made the markets react in both market directions. A probable Trade War in the making have already proven depressing for the USD Index which also slipped below 90.05 losing momentum from the previous move and trading at 89.61.

No different with the FX / currency market where we have seen a quick turn around for the EURO when it marked 1.2180 with a low at 1.2154 level, CABLE at 1.3750, low at 1.3711 and the USDJPY at 105.50 with a low at 105.25. Which actually sparked a price recovery after marking our price objectives and is currently at 1.2410, 1.3883 and 106.20 respectively.  

US #Equities spilled over the #NK225 and recovered to a high at 21551 just in time with the #USDJPY at 105.50 with an extension at the 105.25. This levels were practically aligned that is why we mentioned that a contrary move was indeed in the making. With the USDJPY making a price recovery trading at 106.20 motivated by a technical divergence

And this proves to be the #VALIDATION of both before and after the fact. A typical market play reflecting #VOLATILITY is present in both sides of the market. Friday's #JOBS report would be the clincher for the rest of the week.

USD Reacts on FED Chair J.Powell Testimony

European Majors Defensively on the Decline

Fed Chair J Powell's testimony which covers, jobs, wage growth, inflation well within target and interest rate increases would be as expected for the year. These statements in general have had a favorable price reaction with the USD, contrary to the wider budget deficit being brought into the discussion.

The #DXY move above 90.05/10 on the way up would provide a glimpse of how the end of the trading month of February in a more positive tone. Especially with a triple digit price recovery for the equities markets.

With that said, the repercussion on the #EURO have driven the single currency to decline easily, currently at 1.2235 aiming the initial objective at 1.2180 in the near term. While the decline would eventually spill over with the EURGBP Cross. Meanwhile #CABLE / #GBPUSD has followed price action towards the 1.3880 which could meet some tentative support at the 1.3750. That is when volumes for the USD builds the likelihood of the European majors would initially feel the impact of a USD turn around at this point.

Reference to Strategies:

USD Probable Turn In the Making Posted As of Feb 21, 2018 

DX Futures Roll over up nearly 2.00 basis point from 1st trade position Feb 02, and a 2nd retest was made Feb 16 on the DXY before today's up move Feb 28, 2018.

US Equities On the Rise, USD Steady - Free Market Flows with PositiveTone

Mix Bag for European Currency Majors 

The #Dow above 25131 +169, #SP500 at 2721 +18.15 with #NASDAQ at 7262 +52.10 are all back on the rise led by technology stocks. The #VIX-fear gauge have slipped below the 18 levels added to the positive tone. With Crude Oil steady at the 63.00 and Gold's lackluster trades just about 1330.80 down by -1.90 have given the some support for the USD to hold its corrective session.

Meanwhile, on the currency front only #CABLE or the British Pound slight rise at 1.3975 have been quite resilient against the back drop of the #EURO trading lower to the 1.2294 handle that would seem to still find some weakness moving forward. There has been no real significant news report worthy enough to provide a strong price recovery as the mid-term outlook remains for the EURO to slide from its current levels. 

Even with the EURGBP Cross consolidation pattern seen on a weekly basis on the chart has weighed heavy, thus provide a probable support for CABLE's steadier move reflecting its resiliency with the USD, even when it was on the way up. Declines were limited as it moves in a 'Cluster' formation as some tech analyst would consider a market squeeze as buyers and sellers struggle while the prevailing market trend for CABLE is still up.

The last trading week is ahead for the month and March end of the quarter trading is at hand. Financial Futures expiration in March would provide a glimpse into how the rest of the majors would perform. As the Japanese Yen remain under pressure (Step-down formation) continues but with the NIKKEI's recovery on the plus side may also find some slight contrary opinion from the prevailing safe haven initiatives that had taken place. This goes the same with the USDCHF has followed suit and would remain at the current levels.

Plateful of Market Volatility: DXY EUR GBP & EURGBP Cross Rate

As we were just winding down the end of January and have validated our market call on the USD's range levels, the market place have experienced a not so welcoming sight for major equities declining a total of more than triple figures for the week ending Feb 2, 2018.

And the market's reaction started off with Bonds, US Treasury yields nearing the 3% mark (1st signal), followed by tech and healthcare stocks other than the wide factored in rate hike by the Federal Reserve have contributed much to the decline as the market shift more towards inflationary pressures, in spite of the resounding jobs figure previously reported. 

As of MegaTrade101's focus on the USD index as our primary indicator, for as long as we have derived and have conclusively deliberated on the market's next probable move we would be in a better footing with the market's overall price volatility between equities and the foreign exchange market. Majority of funds denominated in USD are in the market place with foreign denominations in the European markets are separately allocated.

Moreover, the current market conditions have required a much thorough balance in equities and foreign currency trading funds allocation. The delicate balance of portfolio management has come to a point where upon driven by the 2nd signal of the USD marking our objective levels ahead of the time schedule anticipated.

Nothing really new, as noticed in today's trading activities it takes rather a shorter term period in achieving target levels in equity markets. But it takes more than the normal period to attain such objectives in the foreign currency market unlike those days when global connectivity and high frequency trading has not so much dominated the markets.

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A 'TRUE REFLECTION of the US DXY Index

Market Recall: US Dollar dated Sept 2017 

#DXY Index as it speaks for itself.

Market Recall : USD - DXY: Where it came from & Where it's Heading! 

VALIDATED as of January 26, 2018

Keeping an active journal is part of due diligence!

#trading #investing #strategies - For the right Reasons

A more positive tone from European data have pushed the EURO to 1.2527 near its 2nd line of defense as UK GBP bounces 1.4345 during the session. Both ECB Mario Draghi's comments and US Treasury Secretary Steven Mnuchin have completely dragged the USD lower.

The USD - DXY is trading at 88.57 with a session low at 88.43 well within our price call. It would now take some time for the USD to recover which can drag all the way to the mid-year at the rate it is going. Further extensions are expected before any relief recovery can be expected to turn until a substantial short-covering volumes appears. 

Related Information: US Dollar Index & Relative Indexes

Knowing these indices correlation with one another and how to apply their weighted average in real time trades is narrative into actual market price action is key to a successful trading journey.

USD Weakness Dominate Across the Board

As Market Sentiments Weigh Heavy

With the Japanese Yen still gaining ground on its value the USDJPY just broke the 110.00 levels and its currently at 109.89 aiming the 107.80 - 108.00 range on the way lower with an extension that may not be discounted to surpass these levels. The USD's continued weakness has been the dominant factor in the Yen's rise as it is supported by strong PMI & Japanese exports on top of Yen repatriation gradual flow into equities contributed to the appreciation as a whole. Although, the NK225 is on a corrective mode price at 23941.11 from a high at 24129.34 due in part to the USDJPY decline as of today's market movement.

The DXY is at 89.90 as of this writing. And at the rate it's going the 87.50 - 88.80 basis point range is simply a stone's throw away from its objective. On the other hand, this also provided other markets to catch up on the US Equities all time highs and directional movement as an overall picture taken into account. And more importantly the European majors like CABLE and the EURO have gained so much from where they both started during the last quarter of 2017.

ASX 200 Index

One of our market insight on the currency front is the AUSSIE Dollar rise as the ASX 200 index have also benefited from the USD weakness but more importantly Australia's growth have proven to take shape as the index have rallied to its six month high and stayed above the 6000k key price level. 

For the better part of the 1st quarter, we remain well within our time frame mentioned in our previous market outlook heading towards the 2nd quarter mid-year market shift as it now takes just about that period of time for the currencies to make a considerable move to really make a well informed trading and turning trades into an investment position particularly for CABLE, AUSSIE Dollar and the USD Bearish ETF to name a few.

Excellent Reference: 

USD Where it came from and where its heading!

Market Insight: USD EURO CABLE AUD JPY

European Majors Roller Coaster Ride with USD Remain Weak

In spite of a slight relief recovery!

The past three (3) days has been quite a roller coaster ride between the EURO and CABLE. With the EURUSD surging as high above 1.2300 with a pullback at 1.2177 on the previous close. While trying to get a 2nd wind aiming higher currently at 1.2245 price recovery in the early US session. 

Meanwhile, CABLE's emerges from a support on BREXIT gaining ground again back to the 1.3940 after breaching its resistance levels 1st at 1.3750 and 1.3885 with a side pullback before moving higher at the back of the report. Thus trailing back to its original trend higher that halted a USD price recovery effort.

An increasing mix of market volatility between the three major market in stocks and the Forex market now have made head winds flare with price swings relatively more interesting to engage with. For now the market remains to still be on course for European majors to accelerate and much to the concern of a strong Euro will give the ECB something to think about.

And the FTSE 100 at a disadvantage currently down at 7687.63 -37.43 -0.47% to this writing simply awaiting for earning seasons reports. While US equities are in the same corrective mode after record levels nearing the end of a short trading week near the 26k handle where it recently broke through for the 2nd round.

Let's see how US equities pare off gains or continue its advances at the end of the week's closing. Then again, the major trend remains positive and any correction may simply end up to be short-live. And for the USD to remain still in search of a bottom near the psychological price at 90.05 basis point before any significant price recovery can be justifiable.

European Majors Momentum Driven Market USD Weakness

With the USD still struggling to find a relief recovery have finally been taken over by the momentum driven trades from the YEN, EURO, CABLE, and the AUSSIE Dollar. It's like a concerted effort by the GANG of FOUR (4) as we call them in the interbank market. Initially leading an early stage with the Japanese Yen below the 110.50 levels for the past 6 trading days of accelerating value alone have actually led the pack as the rest followed suit.

While keeping tab at the USD weakness, Oil and Gold prices higher the selling pressure surrounding the DXY have made it harder for any immediate recovery. Although, we did mention that the probability would be towards mod-year term for a gradual move as the USD aligns itself for the next subsequent rate adjustments by the Federal Reserve.

Its has now 'VALIDATED' our market call on the USD Weakness Lifts Majors Higher dated Jan 02, 2018. With the EURUSD (chart above) near the 1.2280 high, CABLE at 1.3820 first line of defense, and the AUDUSD back to 0.7980 levels. Therefore, with the USD being our main valid indicator for currency trading when it moves more often than not the rest of it's counterpart moves in line with the corresponding value.

A more direct effect can be expected with the EURO as it carries a heavier weighted average distribution from the USD Index composition as indicated in the link provided for TSOT members access. It also shows the other relative importance of knowing how these distributions are reflected with the rest of the global currencies in Europe and Asia.

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USD & EQUITIES On the HOT SEAT - US Investors Stays while others Shift Gears

Forex Market finally getting some Boost!

The USD - DXY continued weakness contrary to its short-lived, relief recovery posted last Jan 02 have given the EURO a pronounced rally currently near the 1.2150 levels as reflected on the chart below. This move have been a threat for European equities, as quite a number of US equity investors shifted towards Europe including some Asian emerging market stocks. 

EURO as of Jan 12, 2018 Fig A

With a full blown record levels for the US major indices, they have proven to be more resilient in spite of the recent declines which started on the Equity Futures market at the start of the week. And met a considerable rally where the DOW would open higher above 25600 levels. Whisper numbers  of 30k is in the air, as traders are quietly aiming the probability how remote that this would even happen soon or whenever. The same is true for the #SP500 3k and the #NASDAQ along side the #RUSSELL 2000 gaining ground from the past week.

Moving forward, we still expect these markets to stay well within our time frame before any major changes occur. A blow by blow market report would not be necessary as most of our trade positions in the DDM and UDN ETFs are in place from a carry over from 2017 and be able to ride on this 'Reinforced Market Trend' the best way possible.

While on the spot currency front other than the EURUSD, Commodity currency such as the AUDUSD has always been our choice in Asia compared with the USDJPY since it has been confined well within its range especially with the twist made by the BOJ on its monetary policy that saw an acceleration of the YEN back below the 112.00 aiming at the 110.00 levels in the mid term trade outlook. 

USD Weakness Lifts Major European Currencies Higher

Among others!

With some Asian exchanges still closed for the holiday, the start of the new year for China's Hang Seng Index (HSI) moved reaching a 10 year high at 30515.31, +596.16 pts. = 1.99% on the first trading day of 2018. With Shanghai at 3349.05 +41.88 = 1.27% increase likewise, shrugged off the decline in the US equities on the last day of trading 2017.

With the USD slipping into negative territory for the year at 92.08, the USD Index would have quite some difficulty to recover at this early stage. Currently, the US Dollar index is at 91.85 with a low at 91.75. And may find itself in search of a bottom at the start of January trading. For now, any price recovery may simply end up as a relief recovery up until the mid-term of the 1st quarter of 2018.

AUDUSD As of January 2, 2018

Which can only mean good for the Aussie Dollar now at 0.7840 from the bottom price of 0.7500 just last Dec 08, 2017. And the continuation for the EURO currently above the all important price of 1.1880 and is now at 1.2035 to this writing. While CABLE have been dragged from the BREXIT negotiation table, it had worked itself back to its current levels at 1.3555 with a second wind aiming to mark 1.3580 - 1.3680 range for the week ahead.

With the backdrop on OIL's recovery above $60.00/bbl and Gold managing to stay afloat above $1300 /troy oz. at the rate that both markets have kept a firm grip due to the USD soft prices for the 2017, after briefly touching a 103.00 basis point on the 1st week of January 2017. And continued its decline starting the 2nd quarter thereafter. That's is why we have stayed well within the equities market towards the end of the year. With only to carry the AUSSIE Dollar and CABLE as Europe starts to gain economic ground from their recent lows, while focused on BITCOIN and GBTC Investment Trust settlements prior to the CBOE and CME launching their respective trading. An excellent trade decision if we may call it above par! As it would be unwise to trade against the CME when it comes to Futures trading.  

Let's see the first month's trading and decide how the 1st quarter would really look like based on our near term analysis for the USD as always our basis for market reference. 

Commodity Currency Benefits from 3 Majors' Weakness

Aussie has been the main beneficiary of the current market conditions primarily from the USD weakness. And woould continue further into the coming week with market sentiments building towards the three majors including the USD still in the negative territory.

With the Republicans political uncertainty on the final stages of the tax plan thus far have been pushing the USD - DXY still below the 93.60 level at the moment. Although, the USD did have a relief recovery, Retail sales and lower jobless claims did not provide any lift after the figures came out.

The AUDUSD have gained ground trading above the 0.7550 to 0.7600 channel resistance that added to the selling pressure of the European majors as well. But CABLE and EURO are more susceptible to external fundamentals. As the Sterling Pound is also negotiating its next phase agenda that proved to be a negative effect as it is currently at 1.3332 after briefly marking the 1.3465 high two days ago.

Likewise, the EURO's reaction after the ECB left rates unchanged continued its upbeat outlook on the economy while still maintaining quite a 'Dovish Tapering' Tone as most analyst have described the current market conditions. With the EURUSD being the 3rd in line from being part of the weakness among the major pairs, it is still under selling pressure with prices trading at 1.1771 a far outcry from its more important price at 1.1880 which it retested near the 1.2000 dated Nov 27, 2017 

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#USD Rises, #CABLE Intraday Stalls, #EURO Declines

The #EURO's failure to stay above 1.1880, after trading extensions market near the 1.1980 /00 levels have gradually gone back towards the 1.1755 levels where it started from. This was driven by the USD gaining ground especially from the NFP figures favorable to the USD - DXY back above 94.00 BASIS POINT in the US session.

The Euro's decline spilled over to the #EURGBP cross rate where a similar trading scenario can literally be drawn from the simultaneous a short-live price recovery and a reversal for CABLE after a break though on BREXIT became a fact that the market had earlier reacted on. #GBPUSD retreated back to where it is currently being traded within an intra-day price 1.3363 from the previous week. The rising channel on CABLE remains to be intact as the corrective price action is attributed to the market sentiments in UK and NFP report.

A continuing USD price recovery may still place some serious pressure for the European majors to drift lower as market searches further for fresh incentives to do otherwise. For now FX market and precious metals shift towards a decline in volumes as they have been overshadowed by Equities and the Bitcoin craze that had somehow siphoned a considerable share of investors interest and funds traded with prices hovering above the 15K levels.

CORRELATION: Trading the USD EURO GBP & Cross Rates

USD Index (#DXY) is in a tight range and fundamentally supported by rate hike expectations although this may well be priced in the market, After it had marked  the 95.05/15, the DXY could not hold its levels and subsequently drifted back to the 93.40 higher low well within is near term up swing.

The recent correction on the EURO was mainly attributed towards Germany's   Chancellor Angel Merkel declared failure in forming a coalition government. But we see this as a temporary setback which resulted to a decline with the #EURUSD making a low at 1.1722 after reaching last week's high near the more important levels of 1.1860/80 price range. It is only by staying above this price level can we consider a positive breath that can be sustained for the Euro. Thus a retest of the previous 1.2000 levels would not be discounted. 

That drives us to reconsider a near term corrective move for the USD. However, since there is a relative correlation with the Sterling Pound's price action back towards a recovery, the end result would be a conflicting price direction for the #EURGBP Cross rate. As the EURGBP is at its initial price recovery session where a pullback can occur when the EURO fails to go above the 1.1880 by the end of the trading week.

While the UK is getting ready to make an offer with a #BREXIT bill before December summit just time for the US rate hike. And this is also what Goldman Sachs predicted that the #FED would raise rates at least 4X by 2018. Supportive for the USD but not quite without a reasonable leg down to gain traction for a good rally.

For now a thin market would be more susceptible for the unexpected market swings being a Thanksgiving Holiday. Watch the before and after the holiday trading for some action.

Meanwhile, the following reports to watch areas follows:

> Wednesday: US jobless claims, durable goods orders; FOMC minutes;
> Eurozone consumer confidence
>Thursday: New Zealand retail sales;
>German GDP final; Eurozone PMIs, ECB monetary policy accounts;
>UK GDP revision ; >Canada retail sales
>Friday: Japan PMI manufacturing; German IFO; US PMIs

EU GDP Lifts #EURO #EURGBP Cross Rate

CABLE Recovers from early loss

Even before the EU #GDP growth report came out, the EURO's price at 1.1580 have been the critical price level where an expected technical rebound would be met once it had reached that level. A more psychological price support previously defined, plus a well supported growth in Germany's economy have beem the main drivng catalyst that provided the #EURUSD European rally back towards the 1.1747 to this writing. Thus supports the #ECB's tapering plan scheduled for next year to continue its course.

With that said, UK PM Theresa May's political turmoil prompted the Pound Sterling (CABLE) to decline below the 1.3100 levels which has been in the defensive for quite awhile. The beneficiary from these price action which spilled-over into the #EURGBP cross rate, saw prices surged back to 0.8970.

A clear bullish signal that supported prices while making a follow-through from its low at 0.8800. With the USD loosing steam and retreated back down below the 95.00 basis point gave way for the EURUSD to surge a 200 point move along side the EURGBP cross rate. A typical trade strategy that we have been executing for quite sometime. And have shown its effectiveness especially when the USD stalls and a good fundamental report comes along such as today's EU GDP data.

#TSOT Brief: Euro Mirrors USD Index Awaiting a Break

With the ECB directive to make known its intentions of backing off on stimulus would now make a higher probability for the EURUSD to continue back down from its original trend especially the current price is way below the all important level of 1.1880. 

This would provide a mid-term price recovery for the USD as renewed insight of the next US FED Chairman and rate hike expectations in December would be supportive. The exception for CABLE may hold steady to higher compared with the Euro and Aussie Dollar, as expectations for renewed talks on rate hike talks increases. This is also on top of the continuing daily weakness of the precious metals that gives a steadier tone for the USD. 

Market Update as of Oct 27, 2017 

Price Action Speaks Better than words!

Fundamentals Back up Technical. Market & Price Call VALIDATED. 

EURO below 1.1600 while DXY at 95.05/15

As of Oct 26, 2017

Chart Comparison between EURO & USD Index

Inverse Price Relation & Formation

Besides the technical formation on the daily #EURUSD shall confirm these market outlook by the time it does prove to make itself further south of the current prices. The mirror image of the EURO versus the USD Index may prove to be quite an interesting formation to say the least.

As there are two (2) similar complex H/S on each currency reflecting a bigger & smaller formation that provides contradicting price movements that serves as a misdirection for traders. These signals can only be validated after the fact and the market is just waiting for such price action to occur.