DXY On the Tech Angle: Awaiting for new catalyst

Brief Insight: US Dollar Index

The USD slight recovery from the opening of Asia was limited as most traders are awaiting for the NFP report. And this has led the market to trade in lackluster conditions across the board. 

Meanwhile, the RBA rate cut barely made a serious dent at the end of the day's trading that pushed the Aussie back to its previous level nearing the 0.7965. And this goes the same way with the Euro after a round turn of profit-taking that saw a short-lived downturn while working its price swing back higher above the 1.1200. 

When we called an official validation and confirmation of the DXY dated April 30th for a continuing decline; watching the 95.05/10 levels and currently @94.88 to this writing would seem to loose its momentum while waiting for  another valid catalyst to reaffirm its negative tone. The formation is a double-edge sword that literally means that prices has a wider trading range in both directions. For purpose of trade presentation, deciding to use this Trading-View version for our brief market insight would be most appropriate.  

The succeeding cluster of declining prices in yellow coded color block signify a negative sentiment hoovering. Especially, since its already part of a new wave cycle as indicated by the Elliot wave (Blue shaded channel) from where it came from. However, the monthly chart would indicate a new flag formation which still is well within its bull channel contrary to the negative sentiments prevailing in the market.

Riding a Bull Market Trend Extension on N225

Until such time primary central banks changes their stance on interest rates and inflation depending on certain market conditions; market thrusts on equities now focused on Asia and Europe will remain on an extended run. 

Two of the major indices in Asia just to name a few are in focus from the time we have made a market call last February 2015. Although, the Dow Jones, SP500 and the NASDAQ has had a roller coaster ride, the N225 and the HSI along with its European counterparts are now enjoying a good run for the money. The build up of public funds from main-street investors alike have furled the rally extension after the Dow Jones; as earning season kicks in not to mention the milder correction on the US Dollar. The ladder-like climb of the N225 reflected on this chart still shows the trend well intact contrary to the struggle and the Tug of War between major players where it creates a market squeeze among retail investors forcing them to capitulate on major corrective triple digit declines in a daily market move. And with the US Dollar still finding its range break, the Dow's ability to move outside of its similar range would be muted; while Asia would enjoy this primary rally. Constraints in China is keeping it close to slowdown not directly related to the Japanese Stock index 

Reference to: N225 Continues Strength: Justifies Market Call

Related: How to Prepare Riding a Tity to moverend in the Making

Price Action Analysis LIVE GBP JPY 11.28 (+playlist)

CCy Insight: GBP JPY & Cross Rate

The market's ability to change directions can only be dictated by market participnts themselves. And this ie equally true with the Euro's backing the fundamental comments made by ECB Mario Draghi and currently has gained back its lost ground half-way through its previous decline.

While coming from its HI/LO range between @1.3800 / @1.3300; the current price level @1.3488 to this writing is seeking fresh incentives from market data particluarly on both sides of the continent, while waiting for the unemployment data to push market volatitlity. Meanwhile, the EURUSD gradual climb is indeed a welcome relief. Although, it is still pacing price action compared with the rally on Cable. GBPUSD is @1.6125 after coming from an anticipated correction and again is back on track even above the 1.6080 interim resistance of last week's trading.

Market conditions between these two major pairs have slowed with daily price consolidation is seen over the market place.

CCy Insight: GBP JPY / Cross Rate

GBPJPY inline with Yen Weakness

Understanding the cross rate behavior can be a little complicated compared with simply dealing with the majors. However it may sound, the Sterling's continued strength weighed heavier compared with the USD and the Japanese Yen.

Positioning earlier in anticipation for a reconfirmation of a breakout have finally gave through in today's price action from the GBPJPY cross rate.Considering currency value, the USDJPY earlier decline in reaction to the decline of the USD was justified. The value on both currency pairs have lost ground due to the Fed's decision to taper-off this September. Adjustments were made to find an eqilibrium level for the two major currency pairs that would try to rebalance the value of trade between the Japan and the US. Thus a probable re-emergance of the currency wars on trade by the central banks would be in play. This would be our fundamental interpretation as to the USDJPY backing the daily trend as of today by pulling back higher from its low @97.75 and currently @99.25 as of this writing.

GBPJPY inline with Yen Weakness

Forex Market Insight:

Major market mover in the making!

Now that the market has reacted from the direction & time-table by the FED when it comes to tapering QE3, the USD's price action in today's opening levels have signaled a near-term exhaustion. The price gap can be interpreted another way - as a daily breakaway only if a subtantial follow through price action above the 83.50 levels would sustain towards the closing price of the week and month's trading activity.

Market conditions and price behavior shows otherwise; as prices have been struggling in both directions since European opening sessions. The four (4) hourly bar formation since Asian opening have signaled an island session reversal, filling-in the gap lower in the American trading session. Momentum from the USDx low since the Fed's annoucement have gained traction while heading to its current levels @82.57 to this writing. The USDx retracing back-down should not be discounted towards the remaining trading days fo the month that would still justify that the overall trend for the USD heading towards the third quarter have established a higher low. With exceptional constraints whether such price range would be maintained. But if the prices holds true below the 83.05 primary resistance before the end of the month we would probably see a major correction in the making before the real trend higher follows through.
Click to continue

EURGBP Cross Breakout LIVE 6 18

Next Level Analysis ll

Comparative Approach: DX EURO DJ-FXCM USD:

The market has been fixated on the upcoming FOMC report that would probable dictate the outcome of the financial market this week. Although, the G8 summit meeting is focused on the Middle-East crisis and comments indirectly affecting commodity prices that would add to a volatile oil and gold prices is expected.

This would also provide some insights to the FED's clearer "Taper" time-direction from the FOMC that would make market price volatility in the coming days. But in the absence of major reports for now, market prices moves within a tighter range before any major moves are done.

In the inverse monthly chart figure 1; the correlation of the Spot USD Index (Black Line Graph) overlay with the Euro (Japanese Candlestick )provides an indication of the USD weakness more than the Euro have been supported both by fundamentals and technical analysis. And with the increase volume since the start of the year; the first quarter were USD friendly and a major corrective decline have emerged before the end of the 2nd quarter of June as volume again builds-up in line with increase market volatility. Click to continue

Perception Vs. Deception: USDOLLAR-FXCM

At times what is seen and reflected onscreen from candlestick bar formation are quite deceiving. And provide some premature / false signals especially during major Trend markets such as the US Dollar in this typical set-up.

As we have indicted in our previous market view analysis; that the makings of a bull trap can be identified whenever a market squeeze occurs. Price action moves in both directions giving at least two contrary outlooks that would confuse both market participants if not careful enough with their trades. The two candlestick bar formation as shown on this figure chart reflects as "Dark Cloud" bearish signal provided just that. Prices thereafter resumed higher setting newer prices heading North of the chart. There are times during uncertainty that this occurs. Stick with the Major Trend as this is typical of a sentiment based market rather than a technically driven one. Click to continue

Overlay Analysis: EURGBP Cross-EURO vs. USD Index

Confirms: Breakout

To identify a probable breakout is as challenging as ever due to the degree of trading difficulty from the market's reaction. Although, what drives an establish trend is weighed by the current indicators, but more specifically persitent market sentiments that reflects the true price action after the fact. However, major participants and traders with the ability to maintain consistency still has the upper hand contrary to speculative trader/investors to withstand market swings even contrary to their active positions.

In our sequence of market view analysis, we have made mentioned that the USD was one of the best trades before and after the fact. The bullish sentiments and data released favoring the USD rally has provided traders and investors the leverage of finding high probability trades thereafter. Although, going through some analysis most traders had some lingering doubts for the USD to continue its rally after a string of good economic reports trailing the market.

Price action from the earlier highs followed by a slight weakness for the USD indeed provided some market relief which is currently being made. Click here to continue

Market Psychology...

Behind price action: EUR.GBP Cross

Draghi's hawkish tone

As the Bank of England declined to add more to its stimulus package; the statements made by Mario Draghi of the ECB has turned the Euro from an obvious lower trend bias into a round about turn moving higher.

The initial price action remains to have ignited a EURUSD price swing from 1.2950/65 low to its current working price @1.3105; nearly touching its 14day-EMA and nearing its 1.3175/80 resistance price levels. The quick reaction sent most technicians referring to their charts pointing at the next resistance price level which spilled-over to the EURGBP cross that moved at least close to an 80pip range for the current trading session. And have marked an 0.8714 high coming from the low @0.8587-0.8610 range the past few trading sessions before the current price swing higher @0.8705/10.

Market Perspective: USDx-EURO

The unexpected GDP report showed a decline of 0.1% annual rate that may have dampened investor's sentiments. Although, some analyst have estimated a 1.1% rise the 4th qtr. contraction have fueled some investors shifting to USD shorts that prompted the USDx to decline @79.25 basis point in the North American trading sessions.
It was not totally that bad since a stronger household income after taxes and inflation numbers is at 6.8%. And the housing market have risen to a 15.3% from the 3rd qtr. period last year.
Pls. continue click here

Market Sentiments & Trade Position:

by MegaTrade101
The general consensus of a thinly traded market can only be viewed by the tightly-price action among the currency majors while waiting for a some reason that would dominate the market place. This is where traders obvious take is simply to stay on the sideline. Likewise for some, but not for institutional players that can simply position themselves before any market action takes place. Through a strategic process of deduction positions taken on the following has been initiated by MegaTrade101.com:

AUDUSD LONG @1.05229 executed based from a 4 hour chart formation with a double bottom price @1.0515/15 levels on the way up within a 4hour trade session interval. Trend continuation moving forward with initial objective set above the 1.0580. Meanwhile the support levels is set @1.0500 even which is a good level to place a tolerable stop in case the market turns around to the other direction.
A daily close above the 1.0580 would signify a continuation of the trend higher. Volumes/OI have indicated some relatively new speculative trades from institutional players from the interbank market. Speculative retail trades have gotten some attention but with only a limited time frame for scalping a few pips from the price swings.

For a complete analysis of the trade, please click on the link.

GBPUSD long @1.6153 Position 1

A Market Price Reversal...

Or a short-term trend reversal in the making...is what most traders are currently focused on. ECB President Mario Draghi's comments of a rate reduction during the press conference, have pulled the plug on the Euro's advances. The change could have came from various reasons moving forward as negative reports on the revised forecast of a 0.5% lower GDP for the year. And the recent rally above the 1.3100 levels may drag export numbers lower for the German economy that may also hurt exports. 

Although, technically the EURUSD has had some difficulty hurdling the 1.3130 levels which apparently met some profit-taking settlements from a variety of institutional investors. Currently the Euro is working @1.2967 against the USD, as of this writing. Thus, giving some relief for short-sellers who have been holding earlier positions on the short side of the Euro market. Some reluctance can be viewed as to whether this decline can find some stronger momentum as the market only has one more day for the much anticipated NFPs numbers.

The earlier report on the jobless claims came in @370k which happens to be better than expected that pushed the USDx from a registered daily low of 79.55 basis point to its current price level @80.21. Hardly a difference but enough to pullback at its present levels. This have given a better outlook for the USD moving forward as investors shifts sentiments and likewise the flow of positions from the precious metals have done the same for now. As prices for Gold have declined for the past couple of weeks, more on the levels below the USD1750.00 which also supported a gradual decline for the USD.

On the other hand; the Euro's decline

Video Support: Confirms our Market Highlight & Analysis 11.20

Technical Perspective: USDx

The US Dollar Index chart as shown on this figure have clearly came from a HI/LO trading range between the 78.60 low and the 80.27 High spread over the September to the first week of November. Although, there were signals of a probable break then, it was only confirmed when the unexpected high numbers from the Non-Farm Payrolls provided the rally for the USD.  Breaking the technical brarrier of the first resistance @80.05/10 and maintaining its price above the 80.55 basis point closing, have provided justification for the technical and fundamental rally. 

As of the week ending Nov 09 2012; the USDx registered a new high at the 81.08 after breaking the 80.05 - 80.27 resistance range. Thus, establishing three (3) higher lows serving as a good support level with probable extensions beyond the 81.15 preliminary resistance. The next technical tool to be applied would be the Elliot Wave to determine the next leg higher and similar daily drawbacks for the USDx as it moves forward. This is a real classic example where the Donchian Channel breakout after a consolidation have been applied. And likewise using the financial futures of the USDx as a secondary market to arbitrage between the Spot Forex market with Euro and the Japanese Yen.