Trade view /
21 September 2016 at 7:22 GMT
USD Index – I am long the USD via EURUSD (short), AUDUSD and NZDUSD. All have posted a bearish signals yesterday or this morning.
The reverse Head and Shoulder pattern has broken to the upside in overnight trade but we are stalling at the previous high of 96.25 (August 31) so there is scope for a mild retest of the breakout level in morning trade. The measured move target for this formation is at 98.47.
However, we really do need to see a sustained break of the overnight high or we could move lower to form an ascending triangle pattern. It is definitely a ‘hero or zero’ day! Roll on the FOMC (Federal Reserve).
Moving away from the UDSD, and I have now got two units short in EURGBP and here is why:
Monthly – Broken out the channel formation to the upside. However, we have stalled close to previous high of 0.8605 (February 2013) and there is ample scope for a correction lower. Reverse trendline support is seen at 0.8075. Channel support (or possible right shoulder) at 0.7640
Weekly – Completed a bullish Elliott Wave five pattern at 0.8723 while posting a Bearish Evening Star on the weekly timeframe. We have seen a move to the upside after the cross bounced from our bespoke support area at 0.8316-0.8354.
Daily – We have stalled close to the previous high of 0.8625 (July 6, 2016) while posting a Spinning Top type candle on the daily chart. We also have a Demark correction 9 count in this timeframe. We are looking for a possible bearish Head and Shoulders pattern to build. This will be confirmed with a break of the neck line at 0.8377. The full measured move target would be 0.7960.
This is medium-term outlook.
Management and risk description
A move through 0.8500 and we will move stop to entry
short 2 units at an average of 0.8600
0.8631 in 1 unit , 0.8725 in 1 unit
0.8075 and 0.7960
before year end
— Edited by Clare MacCarthy
Non-independent investment research disclaimer applies. Read more