6EM3 High: 1.0810 Low: 1.0590 SidewaysWeekly Kickoff levels are longer timeframe levels where we believe longer time traders will adjust inventories.
FCEU1! trade ideas
EURO DIXIE SWING-SETUP-
UPPER CHART: 6E1! - EUR/USD Futures (1D)
- 50 Ema (purple)
- Jurik-Filtered, Gann HiLo Activator [Loxx} (green/red)
LOWER CHART: DXY - US Dollar Index (1D) (*Inverse)
- 50 Ema (purple)
- Jurik-Filtered, Gann HiLo Activator [Loxx} (red/green)
From a quick glance at the two charts, it might appear that the bottom chart is simply the same as the top chart but employing Line style instead of Candles.
The bottom chart is actually a DXY Line chart but Inverted (Alt+I) with the HiLo Activator configured with inverse colors.
The correlation is rather astounding. Other US Dollar denominated currencies do not share the perceived precision of this relationship.
The HiLo Activator on a single chart would likely provide similar results. The addition of the inverse DXY simply adds additional input.
-TRADES-
ENTRY - LONG - When 6E1! is above the rising 50 Ema ENTER on a Green flip of the HiLo Activator.
SHORT - When 6E1! is below the descending 50 Ema ENTER on a Red flip of the HiLo Activator.
EXIT - On the following opposite flip of the HiLo Activator.
STOP - When the HiLo Activator flips across Price, it creates a point that it then it moves away from.
That point is rarely exceeded on trades that follow the 50 Ema and is therefore the best Stop location.
Moving Stop into the money too quickly could be hit without flipping the Activator! - Judgement Call .
-NOTES-
FALSE SIGNALS - The HiLo Activator will flip at the point when Price exceeds the calculated HiLo range regardless of the candles status.
A flip is not confirmed until the candle closes. (No repaint after close) - A rejection off the Activator ma can be significant!
- Entry: Wait for the flip to be confirmed on candle close.
- Exit: Waiting for a flip will cost gains! Taking Profits early can miss part of the move. - Judgement Call .
EURUSD Short-Term Bullish Analysis/ExpectationThe price is building liquidity (Equal Highs). The Smart Money might break more structures to the downside to induce sellers before going after the equal highs.
Or it could just take that liquidity without breaking structures first. It will depend on lower timeframes orderflows
Click on Boost (like) to support these free analyses!
This Analysis was done using my complete Strategy which includes:
- Smart Money Concepts
- Multi Timeframe Liquidity and Market Structure
- Supply And Demand
- Auction Theory
- Volume Analysis
- Footprint
- Market Profile
- Volume Profile
- Wyckoff
- Etc.
EURO FX Futures ( 6E1! ), H4 Potential for Bearish DropTitle: EURO FX Futures ( 6E1! ), H4 Potential for Bearish Drop
Type: Bearish Drop
Resistance: 1.10590
Pivot: 1.08270
Support: 1.05290
Preferred case: Looking at the H4 chart, my overall bias for 6E1! is bearish due to the current price being below the Ichimoku cloud , indicating a bearish market. If this bearish momentum continues, expect price to possibly continue heading down towards the support at 1.05290, where the previous swing low is.
Alternative scenario: Price may head back up towards the resistance line at 1.10590 where the previous swing high is.
Fundamentals: There are no major news.
EURO FX Futures ( 6E1! ), H4 Potential for Bearish DropTitle: EURO FX Futures ( 6E1! ), H4 Potential for Bearish Drop
Type: Bearish Drop
Resistance: 1.08110
Pivot: 1.06915
Support: 1.05290
Preferred case: Looking at the H4 chart, my overall bias for 6E1! is bearish due to the current price being below the Ichimoku cloud , indicating a bearish market. If this bearish momentum continues, expect price to possibly continue heading down towards the support at 1.05290, where the previous swing low is.
Alternative scenario: Price may head back up towards the resistance line at 1.08110 where the previous swing high is.
Fundamentals: There are no major news.
EURO FX Futures ( 6E1! ), H4 Potential for Bearish DropTitle: EURO FX Futures ( 6E1! ), H4 Potential for Bearish Drop
Type: Bearish Drop
Resistance: 1.08110
Pivot: 1.06915
Support: 1.05290
Preferred case: Looking at the H4 chart, my overall bias for 6E1! is bearish due to the current price being below the Ichimoku cloud , indicating a bearish market. If this bearish momentum continues, expect price to possibly continue heading down towards the support at 1.05290, where the previous swing low is.
Alternative scenario: Price may head back up towards the resistance line at 1.08110 where the previous swing high is.
Fundamentals: There are no major news.
EURUSD Short-Term Bullish AnalysisContext:
The price has been consolidating on the higher timeframe (It can be appreciated on the 1H chart)
We are coming from inducing sellers by consistently producing Lower Lows and Lower Highs within this consolidation.
Today, the price grabbed the liquidity above the Previous Day's High, which led to buyers getting induced and then stopped out when the price quickly reversed, breaking LTF's bullish structures.
Conclusion:
In the short-term, EURUSD might continue higher, targetting the liquidity above the High of the bearish Point of Interest that has already been mitigated.
Not only because it got mitigated but also because we are coming from grabbing all the sell-side liquidity (based on the consolidation), now the price has the potential to seek buy-side liquidity (buy stops) above the old highs.
It either respects today's low and then continues higher
or grabs more liquidity on the sell-side first (below today's low) to then continue higher
This expectation is a framework to look for a potential trading setup. I always wait for confirmations on lower-degree order flows
This Analysis was done using my, complete Strategy which includes:
- Smart Money Concepts
- Multi Timeframe Liquidity and Market Structure
- Supply And Demand
- Auction Theory
- Volume Analysis
- Footprint
- Market Profile
- Volume Profile
- Wyckoff
- Etc.
PD: Like (= to "boost") this publication to support my free analyses, which have been bangers so far! :)
EURUSD Short-Term Bullish AnalysisClick on Boost (like) to support these free analyses
This expectation is a framework to look for a potential trading setup; I recommend you to not just execute based on these levels. I always wait for confirmations on lower timeframes
This Analysis was done using my complete Strategy which includes:
- Smart Money Concepts
- Multi Timeframe Liquidity and Market Structure
- Supply And Demand
- Auction Theory
- Volume Analysis
- Footprint
- Market Profile
- Volume Profile
- Wyckoff
- Etc.
EURO FX Futures ( 6E1! ), H4 Potential for Bearish DropTitle: EURO FX Futures ( 6E1! ), H4 Potential for Bearish Drop
Type: Bearish Drop
Resistance: 1.08110
Pivot: 1.06915
Support: 1.05290
Preferred case: Looking at the H4 chart, my overall bias for 6E1! is bearish due to the current price being below the Ichimoku cloud , indicating a bearish market. If this bearish momentum continues, expect price to possibly continue heading down towards the support at 1.05290, where the previous swing low is.
Alternative scenario: Price may head back up towards the resistance line at 1.08110 where the previous swing high is.
Fundamentals: There are no major news.
EURO FX Futures ( 6E1! ), H4 Potential for Bearish DropTitle: EURO FX Futures ( 6E1! ), H4 Potential for Bearish Drop
Type: Bearish Drop
Resistance: 1.10590
Pivot: 1.08270
Support: 1.05290
Preferred case: Looking at the H4 chart, my overall bias for 6E1! is bearish due to the current price being below the Ichimoku cloud , indicating a bearish market. If this bearish momentum continues, expect price to possibly continue heading down towards the support at 1.05290, where the previous swing low is.
Alternative scenario: Price may head back up towards the resistance line at 1.10590 where the previous swing high is.
Fundamentals: There are no major news.
EURO FX Futures ( 6E1! ), H4 Potential for Bearish DropTitle: EURO FX Futures ( 6E1! ), H4 Potential for Bearish Drop
Type: Bearish Drop
Resistance: 1.10590
Pivot: 1.08270
Support: 1.05290
Preferred case: Looking at the H4 chart, my overall bias for 6E1! is bearish due to the current price being below the Ichimoku cloud , indicating a bearish market. If this bearish momentum continues, expect price to possibly continue heading down towards the support at 1.05290, where the previous swing low is.
Alternative scenario: Price may head back up towards the resistance line at 1.10590 where the previous swing high is.
Fundamentals: There are no major news.
Is USD rebounding or reversing?Thanks to a strong January employment report, the greenback made an impressive comeback from the weakness since Q4. Someone might expect the strength could persist and even test 2022’s high, but I regard this as a rebound and the dollar will likely trade in a range between 100 to 108 (Dollar Index basis) in 1H 2023.
First of all, the strength of greenback last year mainly came from an aggressive rate hike by Federal Reserve that kept the bond yield evaluated and widened the yield differential. As the chart shown, the yield differential of 2-year bond between US and German kept widening since 2H 2021 and reached the peak at Q3 2022. In the meantime, the dollar was on the uptrend against euro and other major currencies. When there was expectation the Fed will slow the hike pace, and ECB was becoming more hawkish to tackle inflation, the yield differential narrowed since Q4 that caused the weakness of dollar.
After the FOMC meeting and before the employment report, the market downplayed the need for Federal Reserve to hike rate and even expected a rate cut by the end of this year in response to possible recession, turned a deaf ear to what J. Powell was delivering. Disinflation he mentioned is a term describing the inflation is dropping, which is nothing new that we can see from the inflation data (Benchmark, Core or PCE) in the last few months, and didn’t mean the inflation have dropped to the target level. His remark on 7 Feb about rate could be hiked to a level higher than market expectation showed there are more works Federal Reserve need to do.
The strong employment report reminded investor inflation is still a major risk to the economy and the Federal Reserve might need to hike further to contain inflation. Market’s expectation on the “terminal rate” revised upward and the bond yield moved higher that contributed to the rebound of the greenback in the last few days.
There are many factors affecting the movement in FX market, but the yield differential seems having a dominant effect in the last few quarters and could be the factors to watch in 1H 2023. I keep my conviction the Fed Funds rate will peak at 5.00% (lower band), which mean two more 25bp hike is coming. However, the hiking pace of ECB is even more hawkish and a 50bp rise is expected in their next meeting, and more could follow after. The higher and stubborn inflation in eurozone could make ECB keep hiking rate even if Fed paused, that might translate to narrower yield differential that is not positive to the greenback.
Another interesting area to note is the yield of US 2-year note. The inversion of yield curve is implying a recession, but what if US can avoid recession, especially when the US job market is surprisingly impressive? Assuming US will not have recession, the yield spread between 2-year and 10-year bond should narrow, then how will they move respectively? A normal yield curve is 10-year yield higher than 2-year yield, while I don’t think 10-year yield will have the potential to rise to 4.5% or higher due to disinflation and technical reason, there is not much room for 2-year yield to rise further and even has a potential to retreat. A lower 2-year yield will lower the yield differential against other major currencies, that is negative to the USD. Even US 2-year yield revisit last Nov’s high, the German 2-year yield have risen 50bp from that level already.
Since the rebound of the greenback released some overbought pressure and created a better entry point, you might consider a long position on EUR(6E) now, a short-term (1M) target at 1.1000 and a longer-term (1H) target at 1.1500. Stop loss could be set at 1.0500. If you disagree with me and believe the greenback in a reversal mode, you might consider a short position in gold since it could face further pressure after recent correction since it still accumulated meaningful gain in the last few months.
Disclaimers
Above information are for illustration only and there is no guarantee on the accuracy of the information. They should not be treated as investment recommendations or advices.
CME Real-time Market Data help identify trade set-ups and express my market views. If you have futures in your trading portfolio, check out on CME Group data plans in TradingView that suit your trading needs www.tradingview.com
