TRADE STRATEGY SPREAD 2 EURO VS. EURGBP

The market's reaction across the board on stocks could be seen as a technical price recovery move from the recent declines. Being at the end of the month's trading this could be attributed to liquidation and short-covering from traders looking at the coming Friday's reports on jobs.

Today's Fed commentary would be looked upon as a remake of the interest rate hike and how inflationary effects are tamed leaving the FED to continue its course towards the end of the year. This would provide a probable chance for stocks to recover within the 4th quarter period . However, the likelihood for the Dow to reach its all time high would not be done in this period alone. Thus, any price recovery may only be short-live and a temporary relief.

Meanwhile, European majors are under pressure as a disjoint trend between the Euro and Cable are running in a discourse. That is why the significant EURGBP cross rates has been more in line where we have seen quite a recovery from its previous low. This move have supported the Euro before a decline is being seen or in the making as of this writing which is currently working below the 1.1200 handle. A retest will be bound to be made given the manner of the market's extension of its consolidation and range trading.

EURUSD 9.30.15

EURGBP CROSS RATE 9.30.15

CCY Corner: USD Divergence 2

Watch for our next "Market & Price Action Analysis On How to Read & Timely Execute Trade Positions from Overlay Chart Patterns Based on the USD" as a primary market indicator.

DXY Update: As of  9.25.15

Technical Vs. Fundamental

This is just one of the tools of the trade identified from the four chart patterns overlay from our previous $DXY analysis and its correlation with the rest of the major currency pairs. The simple selling divergence resulting from the recent decline and the result of a price recovery was fundamentally supported by FED Chair J Yellen's speech for a continued rate hike for the year fueled the current rally for the USD Please refer to the patterns listed below as a fresher to identify individual signals compared with overlay patterns when a combination occurs during the course pf trading sessions.

Reference Chart Patterns

CCY Corner: USD Divergence 2

Identify Chart Patterns: USD Market Insight 7.31.15