Trade view /
15 August 2016 at 7:06 GMT
USD Index – Strong dip buying in the index on Friday would suggest that the corrective bullish sequence is still in play. A full AB=CD formation would take the dollar to 96.75.
Source: Saxo Bank
The daily chart highlights this area as being pivotal through 2016. There is ample scope for a move in either direction today but we look to sell into rallies as a weekly play.
Struggling to pick an FX major that we think will outperform today. USDCAD is showing some signs of exhaustion and there is ample scope for a corrective rally.
Monthly – Highlights a bearish Gartley but, for the last five months, the commodity pair has consolidated.
Weekly – Shows a bullish channel formation. We are holding the trend of higher lows this morning. This gives a mild positive bias but, with last week’s strong selling, rallies may be limited. Last week’s Marabuzo (mid-point from open and close) is seen at 1.3052.
Daily – Five negative days in succession but the selloff stalling at the daily Ichimoku Cloud.
Six hours – Highlights the pair completing a bearish five-wave pattern at the 423.6% extension level of 1.2928 (common in commodity pairs). This is also seen close to the base on a corrective bearish channel formation.
Intraday (15 minutes) – Intraday timeframes highlight a possible reverse Head-and-Shoulders formation.
The brave could look at buying close to the projected right shoulder at 1.2935 (I would only recommend this if we see a strong reversal formation – Doji Star, Bullish Outside Bar). Confirmation would be on a break of 1.2975.
The measured move target is 1.3035, close to last week’s Marabuzo level.
Management and risk description
buying a dip close to 1.2935 and/or a break of 1.2975.
40 pips from or entry or combined.
— Edited by Martin O'Rourke
Non-independent investment research disclaimer applies. Read more