Trade view /
17 February 2017 at 8:59 GMT
We got the move down in the index yesterday in what we believe to be the BC leg of a larger AB=CD corrective formation. The prime support is at 100.25 and we have stopped short at a 100.40 low. There no clear signal that the upward move is underway (in some majors) and I would still buy USD dips to this level.
USD Index (intraday) - Looking for a move higher in CD
I prefer to look at commodity pairs when buying USD and I am starting to build positions in USDCAD and AUDUSD. AUDUSD charts explained below:
Monthly – after posting a bullish outside month in January, we have had to review our medium-term forecast. We have seen mixed trading for the last sixteen months as we hold onto the base of the expanding-wedge formation. We could say that we have completed a 5-wave pattern, but the fact that waves three and one overlap makes this forecast unclear. Last month’s Marabuzo is seen at 0.7395.
Weekly – just holding on to the trend of lower highs. Are we forming a bullish reverse head and shoulders? We'd need a clear break of this week’s high (and close) to call that. Dips are likely to find buyers.
Daily – moved higher in a very impulsive 5 rally. We have now completed the 5-wave pattern and stalled close to the trend of lower highs (at 0.7747). The four-hour chart has posted a DeMark 13 exhaustion.
Intraday (two-hours) – posting an ending-wedge formation. A break of 0.7680 and the measured move target is 0.7618. With the previous swing low and 261.8% extension in the vicinity, this is our target area (today). I would then look to sell rallies back up towards the 0.7680 area as this choppy USD correction plays out.
USDCAD charts, target and stop posted on the squawk.
Management and risk description
Only looking to short down to 0.7615-05 then sell into rallies close to 0.7680 as this corrective formation plays out.
short at 0.7696
— Edited by Jack Davies
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