Trade view /
28 September 2016 at 7:54 GMT
USD Index: The chart highlights the index in a bullish ascending triangle formation with the same smaller formation inside (green). They teach you at the Society of Technical Analysts that to be a true trendline, the market needs to touch three times.
Through experience, I can say that we normally break through on the fourth (especially in wedge formations). This would mean that there is scope for a correction lower from yesterday’s high but losses should be limited. Still buying USD dips.
Source: Saxo Bank
One major pair that looks likely to play opposite to this USD bias is USDJPY.
Monthly: Highlights three inside months, a clear sign of investor indecision. We are between the 50% and 61.8% pullback levels at 100.57-94.61. Trendline support (channel base) is at 97.60.
Weekly: Highlights a bearish five-wave count completed. However, we have no clear indication of a change of trend and could easily see a fifth wave extension (Elliott Wave). Next solid support is located at 93.77.
Maybe we will form some sort of ending wedge but it is far too early to tell.
Daily: Shows the pair in a channel formation. Trendline support is close to 100.00.
Four-hour: Shows an AB=CD formation complete. However, there is little in the way to show that the trend is changing to the upside.
One-hour: The most important timeframe to this outlook is the one-hour chart. Here, we are in a descending triangle formation with the trend of lower highs lining up closely to our bespoke resistance level. This will be our intraday trigger.
Create your own charts with SaxoTraderGO click here to learn more
Source: Saxo Bank
Management and risk description
Entry: selling at 100.80.
Target: intraday 100.10. Medium-term possibly 95.00.
— Edited by Michael McKenna
For more on forex click here
Non-independent investment research disclaimer applies. Read more