US Dollar Smile Theory in Forex indicates that US Dollar can strengthen both in good & bad market conditions.
There are times when you get to the market expecting to see the US dollar falling but to your surprise its making higher highs, showing no signs of slowing down.
Then you wonder, Why?
This was explained using a Dollar Smile Theory.
USDCHF D1 - Here is the update on USDCHF, the big daily resistance is approaching, we can see where the fundamental spike started, but are we going to exhaust where we would expect? Simple react to what we see unfold. These higher timeframes do a bit more time to unfold (for obvious reasons), but they do provide a bit more protection against false sense of confirmations.
EURJPY H4 - Little bit of a relief rally yesterday from our identified support zone, recent H4 candle has closed to break support, potential rejection of weekly key level and retest of that broken zone before possible short continuations, simply support turned to resistance. Very similar to DXY where resistance turned to support.
GBPCHF H1 - Lower timeframe analysis on GBPCHF, double bottom on support, key support zone as indicated with the white horizontal line, this is the start of the 2 stage reversal! Those that have got the advanced course, keep an eye on this! This would effectively act as the confirmation for this setup for intraday trading.
Aggressive selloff fueled by BOE. Other GBP pairs seem like they want to start correction, we have some sort of support zone here on GU, but still very active with bearish markets, interested to see if current price holds as support.
EURJPY H4 - Very much the same kind of trading conditions as GBP just a little less aggressive, which we highlighted yesterday. Looking for exactly the same, WAITING for a break downside to clear 124.500 support and then a subsequent retest, this would be the next possible point to jump in with the downside trend hopefully.
GBPCAD H4 - Rejected the breakthrough and retest yesterday, CAD data pulling ***CAD pairs downside after a bit of a delayed response. However, looking to find support again on that 1.68 handle for possibly buys early next week.
Here is my thought process behind why I have a bearish outlook heading into 2020 - please note that this is the second time that I have ever published analysis and this is just me synthesizing a bunch of ideas. I'm going to start off with the lighter ideas before moving on to the heavier ideas...
1) We are in the late stage of the economic cycle... this is the...
This is a pre-data trade for GBPAUD.
GBP is being bid up prior to the release of UK core CPI data today. It appears buyers are assuming good news which we all know, is highly unlikely considering the state of Brexit and the economy.
The classic "BUY the rumour, SELL the news"
Targeting new lower lows on the 1hr/4hr timeframe as the trend continues.
With the usual news coming from Europe of Brexit and the meetings between the Italian Government and Brussels, we believe the EURGBP may bounce in between two levels until the Italian budget is sorted with Brussels or Brexit is done in March, with a large amount of Sellers at the 0.90900 area and many Buyers at around the 0.89200 area it may mean a major...
With note of the economics, for a while the FTSE 100 trading has mostly been contained to between the two zones, an area of support holding buyers at around the 7600.00 price, while the area around the 7800.00 has been keeping the FTSE 100 in check and acting as resistance stopping further upward movement.
The large amount of sellers at around the 7800.00 will...
Looking to short a weak NZD against the USD, we've put a Fibonacci retracement on the chart and support and resistance levels match with some of the Fib levels where we can use for entry and exit levels, we'll wait for price to pass through the 0.236 line and take a short position.
Looking like a potential build up of orders waiting to go short at around the 1.2600 level if the USD weakens and EUR gains strength, if not and it's a possible wait there could be a chance round 1.1800 level to go long, however would need to wait for USD strength.
Everyone is aware that Gold is a 'save haven' for forex traders when economic results are bearish for a certain asset. Meaning, when some economies are performing well, Gold will reciprocate and also become bearish themselves. This can be seen through the past two daily candle sticks after Germany, one of the top 7 economies, showed positive unemployment. -12K...
One of the economic releases of the day was the U.S. Crude Oil Inventories which helps measures the weekly change in the number of barrels of commercial crude oil held by US firms. The way it works is that the amount of inventories helps influence the price petroleum products which can have an encounter with the inflation rates. Traders have got two things which...
The European Central Bank had a conference where Mario Draghi, President of ECB, presented the ECB. One of his alarming statements were that the ECB has decided to cut their monthly asset purchases in half, from 60bn Euros to 30bn Euros, starting of January. With economic intuition, this enlightens Europe's inflation struggles it has had over the past few...