Trade view /
19 August 2016 at 8:49 GMT
USD Index – The medium-term bias remains bearish for the USD index but we are holding at the channel base so there is scope for a corrective bounce.
We warned of a possible turnaround in the USD index in our tweet this morning.
Source: Saxo Bank
We're going to look at EURUSD as, using correlation, probably it takes on this USD bounce the heaviest.
Monthly – Highlights the pair in a corrective bearish channel formation. For the last 18 months we have consolidated and this lack of clear direction (in this timeframe) looks set to continue.
Weekly – We are in a consolidating triangle formation that has an eventual bias to break to the downside. However, we have been using the Ichimoku Cloud as support. Trend of lower highs is seen at 1.1570.
Daily – We have hit and are correcting lower from a Fibonacci confluence area. This is the 61.8% pullback of the 1.1617-1.0913 move (at 1.1348) and the 161.8% extension from the 1.0913-1.1186 move (at 1.1356). Because of the USD bias, we consider this to be a 4th wave correction so would prefer to buy dips than sell into this correction lower.
Intraday (15 minutes) – The intraday chart highlights a 261.8% extension level (normally exhaustion) at 1.1262 (from 1.1366-1.1326). Bespoke support and solid 2 hour Ichimoku Cloud is seen at 1.1264. The reverse trend line support from the daily channel breakout is at 1.1260. We look for this to hold today.
We then look for a move higher but will monitor price action for a potential AB=CD formation lower. This is a corrective formation….the medium-term bias remains bullish.
Management and risk description
Buying a dip at 1.1265-60 area
1.1320 and 1.1350
— Edited by Clare MacCarthy
Non-independent investment research disclaimer applies. Read more