If you haven’t already looked into japanese candle formations – you need to. I use my knowledge of this type af analysis literally every single day – day in day out on all time frames – everywhere and always.
Looking at the symbol $DXY this morning – one can clearly see a very tall “wick” on the daily chart – with a teeny tiny little body right at the very bottom. Known as an “inverted hammer” or possibly a ” shooting star” – this type of candle formation indicates that “price” (was at one point) at the top of the candles wick, but over the course of only one day ( and in this case even less time) selling pressure has taken price all the way down to the bottom of the formation. This is a very bearish formation – indicating that buying interest has all but dried up , and that the “bears” have more than likely – taken over. Commonly, traders will wait for the formation of the “next day’s” candle for some form of confirmation but for those of us who are already in the trade (short the dollar) this type of candle serves as indication that “perhaps we where a touch early” but that good things are likely soon to follow.
I would consider – that the dollar is finally, and I do say finally – as this has been a “grueling correction” to say the least….finally ready to roll over – paving the way for a myriad of trade opportunities including “long” NZD/USD, AUD/USD , EUR/USD, GBP/USD – as well “short” USD/CAD, USD/CHF.
I am currently in all pairs mentioned above as well as holding my “short” JPY’s against everything under the sun.