Dollar pairs: Still a short - yet transitioning out
Overview: The dollar is still in a down trend channel. Yellens meeting seemed to transition to a Trump, weak dollar theme. Dollar highs and lows starting to transition to a new phase that may break from current channel.
The Chart: In the 1 hour chart of DXY, I've set up a Fibonacci channel in stead of drawing tools (if for nothing else as a visual representation of price fluctuations). The indicator selected is just a very basic, untweaked RSI to measure rate of change.
The Setup: On the hourly chart, the short setup has clearly given accurate and precise entries when price is within the redzone and then confirmed extreme by the RSI (red vertical lines). The buy set up is a little foggy as these zones have transitioned out from Green 1 & 2 into the yellow zone. They are still valid entries if confirmed by the RSI on the transition OUT of the extreme.
The Transition: What we need to see next week is how price is reacting in the lower end of the channel. As we are approaching the 99 level gap, that may be the transition area. (This level is validated by a longer term Fibonacci retracenment and past data as a pivot point)
Valid Longer Term Long Setup: I've included what looks to be a cup and handle pattern on the daily chart on DXY. Although some chartists will disagree since we have made a new high before the handle, it may still be a valid pattern to anticipate a continuation move higher.
The above is not investment advice
The Chart: In the 1 hour chart of DXY, I've set up a Fibonacci channel in stead of drawing tools (if for nothing else as a visual representation of price fluctuations). The indicator selected is just a very basic, untweaked RSI to measure rate of change.
- From the start of the channel, price fluctuated in extremes from a full retracement to both extremes(red to green).
- The buying momentum seems to be coming in at these levels. As you can see above, price is first seen basing from the first green area into the 2nd green area, and lately in the yellow area as price is still declining in the red-kill zone.
- Sellers are still stepping in within red zones
The Setup: On the hourly chart, the short setup has clearly given accurate and precise entries when price is within the redzone and then confirmed extreme by the RSI (red vertical lines). The buy set up is a little foggy as these zones have transitioned out from Green 1 & 2 into the yellow zone. They are still valid entries if confirmed by the RSI on the transition OUT of the extreme.
The Transition: What we need to see next week is how price is reacting in the lower end of the channel. As we are approaching the 99 level gap, that may be the transition area. (This level is validated by a longer term Fibonacci retracenment and past data as a pivot point)
Valid Longer Term Long Setup: I've included what looks to be a cup and handle pattern on the daily chart on DXY. Although some chartists will disagree since we have made a new high before the handle, it may still be a valid pattern to anticipate a continuation move higher.
The above is not investment advice
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