Dollar Index - DXY - I expect GROWTH!
Even though the fundamentals were bearish for Dollar Index, on Friday.
I think that the market will resume growth next week.
I will expect a bullish continuation to 103.6.
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As you can see we Bearish Pattern we expecting price to move down after a consolidation
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🧭EURUSD short term bullishness aheadEURUSD created a very nice bullish structure on 1h. I'm still overall very bearish on HTF, however, the context allows us to be bullish on LTF, cause we're probably heading to mitigate that supply zone on Daily. Don't forget you can adjust the chart view for better context.
📉 Text marks:
🔹 IL = impulse leg. Inside of IL we can usually see inside the structure, which is secondary in nature, like a market noise, unless you trade it on LTF, as it’s own IL.
🔹 ph, pl = protected high or low, which holds current structural impulse.
🔹 bos = break of structure . Based on candle body close below/above previous structural impulse.
🔹 rsz, rdz = refined supply and demand zones. Specific areas to look for LTF confirmations. They are manipulative up-moves before real down moves, or vice versa. Strong hands (the Composite Man, as Wyckoff called it) often come back to such zones to close their manipulative orders at breakeven, before pushing prices further. If body closes outside of the zone, in most cases it will mean the cancellation of the setup.
🔹 if ltf confirms = entry only if there's a shift of structure on lower TF inside of rsz or rdz, or any other type of backtested and approved confirmation.
🔹 liq target = liquidity target: next profit taking levels for strong hands, our main targets based on current price action.
☝️Disclaimer: ALL ideas here are for EDUCATIONAL and MARKETING purposes only, not a financial advice, NOT A SIGNAL. I share my view on the market and search for like-minded traders. YOUR TRADES ARE YOUR COMPLETE RESPONSIBILITY. Everything here should be treated as trading in a simulated environment.
👉I believe that "right or wrong" mentality is a fundamental flaw of any beginner. In reality, a trader is right only when he executes the system and follows his rules, and he's wrong only when he's taking random setups. A trader should find a system he's willing to work with long-term, hindsight test, backtest and then execute live, then refine until perfection.
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Gold Breaks Resistance; Awaiting PullbackThe gold opened low but climb throughout the Asia session and reached the equilibrium level at 1856.
The price has clearly broken above a 1-week resistance and may continue so within its current 2-month rising channel.
Wait for a pullback to 1842 to buy in again, targeting the equilibrium level at 1856, and then the top of the channel at 1871.
EURUSD Ready to Resume Bull RunEURUSD is probably ready for a whole new wave of a bullish run after gaining stronger ground from last week.
The market has broken out from a retracement channel and the price has also resurfaced above all moving averages, as well as an important pivoting level at 1.1750.
The MACD is also showing a returning bull and the line is about to cross above level zero which indicates a sustainable bullish trend.
This week, we expect EURUSD to climb further and traders may wait for a pullback towards 1.1790 to long.
Dollar Resumed Bearish after 3 MonthsThe dollar broke away from a rising structure after breaking below a 1-month rising channel and a demand zone around 93.6.
The MACD is also about to cross below level zero which indicates a sustainable bearish trend to follow.
The market sentiment seemed to have turned risk-on again in anticipation of the fresh stimulus package.
It has also taken the dollar a little more than 3 months of retracement and consolidation since the completion of a previous bearish trend to once again resume depreciation.
This week, we expect the dollar to continue weakening towards 92 and traders may wait for a pullback towards 93.38 to sell the dollar.
Practice Patience with GoldGold had the biggest weekly loss in close to 2 months.
It also ended a 5-week ranging market that took the shape of a symmetrical triangle soon after the breakout from a near 6-month rising channel.
With that, the gold is now on sale, an 11% discount from its all-time high.
While the dollar seems to be in high demand as a safe haven currency, what performed the best is still gold especially in a risk-off market like the one we are facing now.
Gold was just too overpriced but many will be observing for the right time and best price to buy the gold again before the next gold rush.
Therefore, we will probably expect the gold to fall into another range eventually and we will practice more patience with trading gold.
Otherwise, the best price to start buying the gold will be from the 1800 demand zone.
It was once a very strong resistance throughout 2012, and the bull rush has begun shortly after it was broke through.
Dollar's Comeback ContinuesAfter ranging for more than 2 months and reaching a 29-month low, the dollar started to show signs of reversal.
The reversal took off strongly and broke above the top of its previous range just below 94 with very little pause.
The dollar continued to climb and finally reached the top of a 6-month falling channel where resistance was presented.
However, a reversal failed to take place and the dollar went out to break above the previous day high on the very last trading day.
US dollar rose amid a risk-off market sentiment and also due to a technical oversold.
The dollar is likely to inch higher further before Friday's NFP.
We will keep our short-term view bearish or slightly towards ranging for now until it reaches the supply zone above 95.
Pound's at riskThe GBPUSD faced strong resistance when it approached a major supply zone around the 1.34 region.
Its rally against the dollar was confirmed to have ended when smashed downwards shortly into the September period.
Breakthroughs of important rising trendlines followed through as risk sentiment continued to build up which has led to a further rally for the dollar.
GBPUSD now faces a last line of defense at a 4-month rising trendline with no obvious buyers at the moment.
Putting dollar's rally aside, the pound is constantly facing pressure due to its brexit deal which seems very gloomy.
What we can see right now is that GBPUSD is most likely to revisit its brexit low at 1.20 in time to come.
How to Catch the Bears for EURUSD?If you hadn't realized, EURUSD has marked the end of its final bullish run last week.
The market now trades within a range and is currently pulling back from a bearish trend since yesterday.
While we can't be certain that EURUSD will eventually dip further, it's a safe and reasonable bet to sell again as it approaches the top of the current range.
If we were to commit to selling and should the market does continue to take a bearish stance, the bears should appear before the price climbs beyond 1.1950.
By counting the number of waves of the current rebound from 1.1755, the price has the potential to develop another bullish wave and reach somewhere between 1.1860 and 1.1950.
The ECB press conference is just ahead and that will provide more clues as to how bearish the euro will get this week all the way till next week's FOMC.
This plan should work as long as the ECB does not turn hawkish all of a sudden, which is very unlikely given the current economic condition in the eurozone.
One More Dive for GoldAs the gold failed to extend gain this week, the reversal has taken place.
2 waves of bearish movement have been completed, leaving one last wave to go.
Why one last wave, or at least one more wave? It is because every trend within the current range took at least 3 waves before a reversal.
How Far can Dollar Fall?The dollar has posted its biggest loss in a month since 2009.
One glance at the monthly timeframe, the dollar is certain to have confirmed its peak at 103.
It is also almost certain that the dollar has begun a mid to long term bearish trend as it fell back to the starting point of a 2-year rising channel just above 93.
Since we are certain that the dollar will continue to weaken, how far can it go?
At a glance, I'd say it will face little support towards 89, a major resistance since 2009 until it was broken in late 2014, turned major support since early 2018.
The fed has made it clear that it will hold rate low and unchanged through 2022, the unprecedented amount of money printing, and the dire situation faced in the US economy due to the pandemic and many other political issues, can only lead the dollar further south.
It is probably unnecessary to explain too much why the dollar will fall as there's little to no reason that the dollar should climb, apart from being a safe haven currency, which...I don't know...imagine gold just keep popping up from the ground, what would happen to its value?
Anyway, since the dollar is still somewhat seen sitting at a 26-month low near 93, I suppose there'd be significant pullbacks, which probably won't last for long before it continues south.
Dollar Breaking 9 Year Rising TrendlineThe dollar had the biggest weekly fall in 4 months and broke below a 22-month support level.
At the same time, the dollar is also threatening to break below a 2-year rising trendline which could open the floor for more selling.
In fact, the dollar is destined to fall since it broke below a 2-year rising channel.
Of course, there are a lot of fundamental reasons to support a weakening dollar such a diminishing Treasury yield or a more risk-on market where the global economy is recovering from the pandemic other than the US's ever-breaking of a new high in the daily new COVID cases, as well as a surge in the death rate.
The US and the dollar have surely disappointed the market big time due to the mishandling of the pandemic and allowing a relapse of such magnitude where the current figures of new COVID cases are more than a fold than the highest in April.
The dollar is most likely to extend further downside but not without any pause or pullback.
Once the dollar successfully breaks below the 2-year rising trendline, the next level can be seen at the 2-year demand zone sitting above 93.
Dow Jones: Is this the beginning of a 2nd SELL-OFF?Since coronavirus first broke out in February globally, the global stock market has tanked and plunged in a devastating fashion but has quickly recovered once the lockdown began and the economy started to open up again.
However, it is obvious right now that the US is facing a relapse as new COVID cases rose to an all-time high, and death rate picked up again.
Besides, the US-China tension has worsened in one of the worst situations, and also, the US stock market is obviously overbought and is mostly driven by the government through unprecedented printing of the dollar.
The Dow Jones fell sharply since the COVID cases started to spike again in early mid-June and it struggled to climb as the situation was not under control.
Moving forward, we can see a prominent sign of exhaustion as one of the biggest US stock markets, Apple, plunged last week.
The price was seen resisted at 27000 and started to reverse in the last 2 trading days.
We will see a retest of the bottom of the 4-month rising channel and chances are it will break below if COVID situation, as well as the US-China tension, continued to worsen.
So to draw a conclusion, the long-awaited 2nd wave of a sell-off could happen anytime, and we see the price plunging towards the 24000 and 23000 regions in the next couple of weeks.
USDCAD Range BoundUSDCAD continued moving within it's range without a direction this week.
This is good for us as it provides a clear selling price, at the top of the range.
Before closing, USDCAD got supported at the bottom of the range once again, therefore, this week we could look to sell USDCAD at the top of the range once price gets resisted.
However, if USDCAD breaks above the current range first, we could wait to sell USDCAD at previous supply zone.
USDCAD Weekly Forecast 20th - 24th JulyUSDCAD continued moving within it's range without a direction this week.
This is good for us as it provides a clear selling price, at the top of the range.
Before closing, USDCAD got supported at the bottom of the range once again, therefore, this week we could look to sell USDCAD at the top of the range once price gets resisted.
However, if USDCAD breaks above the current range first, we could wait to sell USDCAD at previous supply zone.
Dollar Falls Slowly But SteadilyThe dollar continued to fall last week and reached a 1-month support level at 95.8.
It rebounded at first but gains were wiped out in the very next candle, showing a lack of buyers at the support.
The dollar is currently establishing a bearish trend within an H4 falling channel, both highs and lows are continuing to form lower, and thus a clear-cut bearish market.
This week, we shall continue to look for a selling opportunity.
1) If the dollar rebounded off from the current support, wait for the price to reach resistance zone 96.2 - 97.35, as well as the top of the H4 falling channel, and look to sell.
2) If the dollar breaks below the current support, simply wait for a pullback towards the breakout level to sell again.
Look out for the near 2-year support level which coincides with a W1 rising trendline.
USDCAD Head and ShouldersUSDCAD has been moving sideways after a major downtrend breaking out of a descending triangle a couple of weeks ago.
After this week, we can see that price has formed somewhat of a head and shoulders pattern, with current price forming the last shoulder.
Additionally, the last shoulder is currently forming on a strong resistance point from a falling trendline.
Should this resistance hold, we could look to sell USDCAD back it's previous low price.
Gold has More Room on the UpsideWay to Gold! The gold has once again broken new high and reached 1779, a level not seen in more than 8 years.
As high as gold already was, the demand for safe-haven asset continued to rise through the pandemic.
There are so many reasons - the unprecedented printing of money (i.e. bond purchases), the super low-interest rates which will last for a couple of years, and of course the uncertainty of the pandemic and the recent surge in COVID cases in the US.
Historically speaking, the most recent financial epidemic in 2008 has clearly shown us just how much can gold climb while the economy is trying to recover from recessions and depressions.
So, just in case if you're thinking that the gold is over-valued, it's probably more like 'undervalued'.
The break of a new historical high could very well be the beginning of the rise of gold price.
However, it's likely inevitable that strong resistance will be faced the nearer price gets to the historical high of 1920, and before that, the near 9-month supply zone just right ahead.
As of now, gold should have a smooth journey ahead to climb further, at least not before it reaches 1810.
Dollar May Climb Further but Not for LongThis month will be critical for the dollar as it will show whether the price will stay supported within the rising channel or confirm the break.
What's likely the outcome is the dollar will start to really weaken, both fundamentally and technically.
103 probably marked the peak for the dollar and the price has already wiped out all gains in March if we exclude the portion from below the rising channel.
The chart has shown that the dollar is losing its value and the most recent break-below of the bottom of the rising channel determined the case.
The Fed during its last FOMC conference said that interest rate will remain low throughout 2022, which means that demand for dollar will not be expected from a rate hike for a good period of time.
The Fed's balance sheet has expanded to a really horrendous figure during this pandemic which I don't even want to talk about it more.
To sum it up, the dollar may still rise a little further as demand for safe-haven currency such as dollar will rise as COVID cases rose last week.
But it won't be long and the dollar will start to lose its value and should the month closed below the channel, that shall be the beginning to the fall of the dollar.
Dow Jones Brace for ImpactThe US stock market recovery was certainly too extensive which is well reflected on the chart as the market started to reverse.
The trigger came from a sudden jump in the number of new COVID cases in the US but the market rebounded and climbed as the number of new cases did not continue to rise.
However, the market was seen falling again after continuously resisted at the bottom of a broken rising wedge and most importantly, new COVID cases rose to more than one-month high.
The most recent number shows that new COVID cases rose to more than 30,000 and has been rising for 5 consecutive days.
If nothing else goes wrong, we should see a significant gap down once the market is opened for the week and panic arises from this incident will most definitely sustain for quite a while thus the opportunity to continue to sell.
Will Dow Jones Extend Fall?The recent fall from early last week, specifically last Thursday after FOMC, has some similarities with the crazy selloff in late February.
One glance at the daily chart should be enough to explain the resemblance.
Now that the price has retraced significantly and undergone a period of resistance, it's about time the price will continue to fall or otherwise.
One thing to take note is that the COVID cases in the US has started to rise again and yesterday's figure just broke 13th June high.
This could potentially increase market fear and cause another wave of a selloff in the stock market.
So, everything seems to lineup pretty well, most importantly the risk-reward ratio is pretty good too.
