It looks like it might be back to 'risk on' with a falling USD. I will have another look later on when the market closes.
The 80 level has held the USDX up during overnight trading and the Asian session. The EURX still hasn't broken down below the support of the 4 hr 200 EMA though. yet.
It is worth noting that the DMI lines, both positive and negative, on both of these indices charts are below the 20 level and, also, the ADX line is trending down on both of them too. In other words, there is no real trend, or momentum move, on either of these indices at the moment. Thus, when there is no trend, there is no trend trading.
I think today's US session might hopefully provide some movement and guidance since it is also Options expiry. Stocks have to decide if they are going to keep rallying up from the DOW 13000 level or fall back down. This, then, will hopefully decide the fate of the USD and will give currency trading some clear direction.
I'm not saying which way the market will head. I never do. I just watch for the technical signs and the patterns to emerge. At the moment though, there is no clear and over-riding pattern.
Thursday 15/3 (7pm Paris)
The broader markets have rallied today and it seems the USD is back to its previous pattern of falling in line with increased optimism. The USDX has fallen but the EURX has pretty much just bounced along sideways and is still within the symmetrical triangle.
The transport sector of the stock market has rallied strongly today and these stocks are often viewed as a kind of barometer for the stock market and broader markets. The fact that the markets are holding above the DOW 1300 level and that some of these market leading sectors seem to be moving forward suggests to me that this positive sentiment rally might still have more to run. If that is the case, I'd be back to looking for 'risk on' type of trades if and when we see the usual correlation return.
This is a chart showing the DOW and its break above the 1300 key level.
I know the Euro zone problems haven't gone away but there seems to be pent up momentum wanting and trying to move the markets forward. So, trade what you see and, at the moment, it looks like 'risk on' is trying to force its way back in. I'll be keeping an eye on the USDX and the 80 level to see if it can stay above this important support level.
Thursday 15/3 (9am Paris)This is a chart showing the DOW and its break above the 1300 key level.
It doesn't seem that a whole lot has happened since I last posted. The wider market seems to be pausing a bit before the next move, either up or down. The USDX has bounced around sideways.
Ive moved my bottom trend line on the EURX slightly to reflect the new support offered by the 4hr 200 EMA.
It is Options expiry this Friday. You may say 'so what who care I trade FX', BUT, the wider markets dovetail together and the stock market, at new highs and huge resistance, is playing into the impacts on the USD which, in turn, affects currencies. So, it might nearly be best to just keep watching the currencies until then. That is all I'm able to do anyway given I'm on the move so much!
Wednesday 14/3 (11 am Edinburgh)
We head to Paris shortly but I have just noticed that the USD is pulling back a bit. The EUR is now rising and did fail to break and close below the key support of the 4hr 200 EMA as warned about.
I think the wisest thing to do right now is to wait; wait to see if this risk on appetite continues. Then, importantly, wait to see if the USD continues its de-coupled upwards move OR, whether, it returns to the the usual correlation of USD falling as positive sentiment continues. I've said this before but I think it's wisest to stay out of the market when the sands and tides are shifting as they are at the moment. The stock market, and DOW in particular, is at a huge resistance level and this kind of turbulence is really to be expected. It is a major moment for stocks currently, for them to either keep rallying or to bounce back down from these key levels.
We have seen risk appetite continue with rising stock markets across Asia today. The USDX has continued to rally in this new de-coupled way though too as it seems to become clear it will not be devalued by any further printing of money, in the short term at least anyway. The USDX has rallied but the EURX has still failed to break below the 4hr 200 EMA, for the time being at least.
The currencies seem a little confused by this new correlation too.
The A/U, whilst technically due to fall on a rising USD, if risk appetite continues though, it should probably join in and rally too. Thus, it is bouncing around sideways in a clear indecision pattern.
The E/U is looking like it might commit to some further falls shortly too. It has broken the trend lines etc and now just needs to get past the psychological 1.3 level. I have a very new TS signal to short this pair but, if I was trading it, I would still wait for a close below the 1.3 level.
The USD/SGD looks like the best trade from a technical view point to me though. I also have a very new TS signal to LONG this pair but would probably wait for a close above the daily 55 EMA, the blue line on my chart. I'm also still not sure how long this rising USD will tag along with increased risk appetite.
The A/J trade is still going along, yet again without me. It is up about 45 pips from my 87 entry level. I will probably try to get in on this at the next level of 88 if this move keeps going. I might have more time to trade by then.
Overall, it seems like there is an appetite for 'risk on' but the usual correlation of a falling USD along side of this is de-coupled, for the time being at least. I would be vigilant with my trades therefore if I was trading.
We head to Paris today so will be out all day again
Tuesday 13/3 (8.30 pm Edinburgh) The A/U, whilst technically due to fall on a rising USD, if risk appetite continues though, it should probably join in and rally too. Thus, it is bouncing around sideways in a clear indecision pattern.
We head to Paris today so will be out all day again
We've had some interesting new trends today with the USDX rising BUT stocks rising too. There seems to be a de-coupling of these two at the moment. Previously, as the USD rose, stocks would pull back. Not today though, both of these entities have risen. The DOW has had another close above 13000 and this seems a quite bullish sign. I will be very interested to see if the USDX keeps rallying up if stocks continue to rally as well. This, indeed, would be quite a new type of correlation, not unheard of but, still, rather new. You need to be careful when the tides, of any nature, shift and turn.
The USDX has closed back above the all important 80 level but the EURX, whilst down, has closed below the triangle trend line and monthly pivot but, not the 4hr 200 EMA level.
Most of the pairs have just chopped around today as they seem as confused with this new alignment too. I do see though that the A/J has moved above the 87 level. I have had a TS signal to LONG the A/J but no other TS signal has evolved on any other pair. I missed my 87 entry here today as I was out all day but I will keep track of its progress, none the less!
Some announcement about further Greek debt vulnerability seems so have sent the USDX back up. That's why waiting for confirmation is so important. Technical trading on longer term charts continues to be fraught with Fundamentally based 'curve balls', particularly when there are so many issues currently being sorted with Euro zone debt issues.
Still, obviously now, no new TS signals or trend line breaks. I'm glad I'm away!
PS: I'm just about to head out but spied this one again too. A LONG on the USD/SGD, after an upward trend line break and new TS signal would interest me if we move back to 'risk off'. There are options available for which ever way the market decides to head.
PS: I'm just about to head out but spied this one again too. A LONG on the USD/SGD, after an upward trend line break and new TS signal would interest me if we move back to 'risk off'. There are options available for which ever way the market decides to head.
The USDX has continued to slide a bit overnight but is currently trying to put in a bit of a bounce. It looks like it is trying to get back above the weekly pivot and to stop from sliding back into the symmetrical triangle construct. The EURX has lifted slightly too. It is still looking liking it is going to head back to 'risk on', that is, with a falling USD.
I am unable to load my currency chart platform, yet again! So, I cannot give any updates on the currencies that I was keeping an eye on.
Just got platform sorted by Go Markets tech guy. Thank you!
The E/J looks good! I don't have a full TS signal just yet though so, if I was trading, I'd wait for this even though we've had the triangle break out. I'm out all day today so will obviously miss this trade if it evolves.
Similarly the E/U looks like setting up to. I almost have a TS signal to go LONG on this pair but would wait for the break and close above the 4hr 200 EMA. The monthly pivot is just 50 pips further up so might give any up move some grief. Like I said though, I'm out for the day.
The A/J is still on my list: if risk on continues then a long on a TS signal (one is looming) and a break and close above 87 would interest me too.
If trading today: I'd be watching to see if the indices keep tracking for 'risk on' as they currently are doing so. Then, I'd be stalking the above pairs for moves and opportunity to enter. You don't need a heap of pairs to trade...just a few...find a signal and, then, one with a trend line break and that is moving in the direction of the trend!
Monday 12/3 (7.30pm Edinburgh)
Just got platform sorted by Go Markets tech guy. Thank you!
The E/J looks good! I don't have a full TS signal just yet though so, if I was trading, I'd wait for this even though we've had the triangle break out. I'm out all day today so will obviously miss this trade if it evolves.
If trading today: I'd be watching to see if the indices keep tracking for 'risk on' as they currently are doing so. Then, I'd be stalking the above pairs for moves and opportunity to enter. You don't need a heap of pairs to trade...just a few...find a signal and, then, one with a trend line break and that is moving in the direction of the trend!
We actually didn't get another candle close above the all important 80 level on the USDX since I posted this morning. Some of you might think I'm too conservative BUT, if you followed my thoughts, it would have kept you out of potentially losing trades!!!!
The EURX has also continued to rally after the bounce off the bottom trend line. Gee, you gotta love technical analysis at times like this guys! It is sooooooo straight forward.
I haven't got a TS signal to LONG on the EURX yet. Similarly, I haven't got one to SHORT on the USDX either. Thus, based on this, I think we could be in for a bit of sideways chop until the markets work out which way they want to head. BTW, the VIX is way down, pointing to overall confidence so, one might expect the USD to keep falling and for stocks to rally. BUT, the notion of US economy strength and no further USD money printing is pushing the USD up, as is rising fear over increased Middle East tension. So, it's as clear as mud for now......right!
I think we need to be a little more patient to see how this situation will indeed evolve.
These set ups look interesting though....it comes down to finding those pairs setting up with the most likely trend signals and, also, with trend line breaks.......
E/U daily: I have to admit, although not certain about the next trend...risk on looks best!
E/J 4hr: A break up looking good too......
USD/SGD 4 hr: if 'risk on' continues then look for a break down BUT, if the USD rallies and we keep with 'risk off' then look for a trend signal and a break of upper trend line.
Monday 12/3 (6.30am Edinburgh)
There has been a 'risk off' approach to trading throughout the Asian session today. The good US jobs data from last Friday seems to point to a reduced chance of any more easing, that is, printing of USD, and this has had the flow on effect of boosting the USD. There have also been concerns over a further slowing down from within China.
The USDX has broken and closed just above the critical 80 level. The first candle to close above this level did so on my charts to the tune of just 80.06 though. The next candle has yet to close above 80 but is looking bullish indeed. The EURX though has had a candle close below the monthly pivot level of 104.2 but has yet to break and close below the bottom triangle trend line and 4hr 200 EMA.
I would still want to see the EURX close below these key levels though AND the next USDX candle to close above 80 before committing to trading with 'risk off' sentiment.
I am still not able to open my platform that has all of my currency pairs on it so I am not able to see how this sentiment has been reflected in the pairs at all.
I am now in Edinburgh and will be out all day anyway but I was hoping to be able to see if there were any trades worth taking so, I'm not too happy with my broker!
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