Trade view /
08 June 2016 at 8:12 GMT
USD Index – There's no clear indication that the selloff in the USD index is finished yet but we have a 261.8% extension at 93.83 (markets have a tendency to push past) and a 61.8% pullback level at 93.44 (current price 93.69). Starting to look for reasons to buy the USD. The intraday chart also looks to be forming an Ending Wedge.
USDCHF – Took a small long in USDCHF this morning as it is the only USD-based pair that is showing a sign of turning.
The monthly chart highlights a bullish Outside Candle posted in May. As long as this formation is not broken (base at 0.9442) then the long-term bias remains bullish.
The weekly chart highlights a wedge breakout that has a target area of 1.0248. The fact that we had a bearish Outside Week (last week) and the pair has moved back inside the wedge is a concern. However, dip buying now and a weekly close above 0.9683 (wedge trend line) would indicate a retest and rejection and keep the focus bullish.
The daily chart highlights the pair stalling at the 61.8% pullback level of 0.9642 (from the 0.9446-0.9958 move). It's interesting now that the 161.8% extension is close to the wedge target and a good medium-term focus.
The intraday chart highlights a Demark 13 exhaustion count and a bullish Outside Bar from the base. We are far from having a reversal formation and intraday resistance is seen at 0.9707. However, these two factors do flip the intraday bias to bullish and, with risk/reward at close to 5/1, we are willing to buy this dip.
If this intraday trade plays out we would look to close to 0.9700 and then re-instate longs on a dip close to 0.9675.
long at 0.9652
— Edited by Clare MacCarthy
Non-independent investment research disclaimer applies. Read more