Euro's Current Trend and a look into near-term volatility
Check out my previous analysis on DXY
Background: As mentioned above in my previous analysis, dxy has tested early 98 area and now seemingly forming a temporary stop until Wednesday data come out. Meanwhile, I'd like to take a quick look into the Euro pair see if we could find any trading opportunity. It seems to be clear at this point that dollar isn't in favor of particular direction. While we are likely to see some trading opportunities in tight range, it'd be hard to call for a new trend at this point. What us traders must be aware however, CPI or retail sales data will have intuitive market reaction, as dxy's focus right now is largely on monetary cycle rather than the event itself. For those who are interested in Fed's footsteps, we are seeing now some major divide within FED for rate decision. If indicators come out to be bad for U.S., (it will be bad for EU, trust me.) we are likely to see start of new bear trend for DXY , as Fed may start another round of QE .
Technicals: Euro is currently in descending channel as shown in the chart. Therefore our trading plan will be short EU but with great caution. 1.09895 area would be the key level for EU and it makes more sense to close trades around this level. Probably by the time we reach this area, the price will likely to consolidate until major event happens. I would not personally buy into that area just yet.
Action Plan: Short Euro till 1.09895 at any minor bounce.
Background: As mentioned above in my previous analysis, dxy has tested early 98 area and now seemingly forming a temporary stop until Wednesday data come out. Meanwhile, I'd like to take a quick look into the Euro pair see if we could find any trading opportunity. It seems to be clear at this point that dollar isn't in favor of particular direction. While we are likely to see some trading opportunities in tight range, it'd be hard to call for a new trend at this point. What us traders must be aware however, CPI or retail sales data will have intuitive market reaction, as dxy's focus right now is largely on monetary cycle rather than the event itself. For those who are interested in Fed's footsteps, we are seeing now some major divide within FED for rate decision. If indicators come out to be bad for U.S., (it will be bad for EU, trust me.) we are likely to see start of new bear trend for DXY , as Fed may start another round of QE .
Technicals: Euro is currently in descending channel as shown in the chart. Therefore our trading plan will be short EU but with great caution. 1.09895 area would be the key level for EU and it makes more sense to close trades around this level. Probably by the time we reach this area, the price will likely to consolidate until major event happens. I would not personally buy into that area just yet.
Action Plan: Short Euro till 1.09895 at any minor bounce.