If the U.S Dollar can put in a solid “swing low” and reversal down here ( which it appears to be doing ) then it looks like a number of solid trades setting up, with well-defined risk – having that stops can be put just above or / below any number of USD related pairs such as:
- short EUR/USD with “stops above” 1.39 ( that’s only 30 pips risk )
- short GBP/USD with “stops above” 1.6820 ( 100 pips )
- short AUD/USD with “stops above” 94.60 ( 60 pips )
- long USD/CAD with “stops below” 1.0856 ( 100 pips )
- long USD/CHF with “stops below” 86.90 ( 75 pips )
The Kongdicator hasn’t “officially rung the bell” on any of these, as the technology “looks ahead” a specific number of bars / time , taking into account near term volatility and a number of other factors BUT!….I’m out ahead of this with some “general trade ideas” should we see a solid swing in USD, as early as Monday / Tuesday.
Short of that, seeing the U.S Dollar fall below the recent lows in $DXY around 79.28 would have it in some real trouble, simply extending gains in all the currencies mentioned above.
Looking at “EEM” turning lower as of yesterday ( near the “same ol area” of resistance ) also suggest possible U.S Dollar strength ( if you can ever call it that ) to come.
From a fundamental perspective, as much as the Fed wants / loves a lower USD,we’ve come to an interesting junction where ( for the Fed unfortunately ) a showing of strength is really whats needed if these guys want to uphold “any sense of confidence” on the world stage.
Most of you likely don’t realize that Russia’s “announcement” that Gazprom ( largest supplier of Nat Gas to EU ) will soon be signing a massive deal with China “priced in Yuan” was a huge reason for market concerns / risk off type action over the last couple of days as I don’t imagine “that” was mentioned in American news.
I guess J.P Morgan ( one of Americas most “trusted banks” ) shit canned earnings / missing both top and bottom line expectations too but……you know….”that” can’t have much to do with anything either I suppose.
As well curious if anyone took note of my “short Japan trade” EWJ puts / short going back to March 31st?
Have a good weekend all.