FYI, I'm not a currency trader but I run charts on a lot of different things.
So I'm writing this from technical analysis point-of-view.
Also my understanding of the macro world and geopolitics is shallow. So, I don't know the intricate relationship between EURO and USD.
I'm a technical trader and I mostly trade options.
I just want to share this.
I know that a lot of people are bullish on USD but be mindful of the trend. Technically USD looks a like penny stock that is on a long decline after a pump and dump.
$DXY popped this week however USD has been riding its bearish momentum for months now and its protectory is still trending lower on all bigger time frames (M,W,D). The shaded green area is where it could potentially find support and also reverse.
EURUSD Monthly
EUR has been doing very well since May with a nice uptrend despite having a bearish trend in monthly chart. It has cleared a lot of hurdles along the way during its continuing uptrend but it's inching closer to the 200MA on monthly chart.
Moving Averages:
8EMA: YELLOW
21EMA: CYAN
34EMA: WHITE
50MA: PINK
200MA: PURPLE
Indicators: Moving averages, Squeeze Pro, Trend Oscillator, ATR (14), JT Trend
Update: $DXY got a sell signal on daily chart = EURUSD buy signal.
Since this signal is a fresh one it can cancel if $DXY strengthens.
$DXY (For some reason, DX! (US Dollar Index Future is not available on TOS and $DXY stops after 4:20PM (EST) on ThinkorSwim)
EURUSD
Update on $DXY
I could be wrong on both of this but this is what I'm seeing.
1.The red zone is the possible stall/resistance area for $DXY before it resumes its downtrend.
2.With a possible timing sometime around Jan 23 (it's Saturday so, it's not an exact science) (I'm still learning fib timing)
By far not the world's best technician, but one chart that I look at a lot to give clues on EURUSD and thus DXY has been the Bund - US10Y spread.
This seems to indicate that EURUSD (The Cyan line) is in the process of topping.
I've already been slowly scaling back some of my implicit USD shorts.
Would be nice to see what your indicators say regarding the DE10Y - US10Y spread currently and whether or not they start saying the same things for the DXY sometime in Feb.
Thank you for the insight into the charting DE10Y - US10Y.
EURUSD is making a good rebound from 34EMA (D). It has a couple of hurdles like 1H 200MA at 1.22506 and
I see a good support zone (a bit wide) for EURUSD from 1.2130 to 1.1869.
If EURUSD can hold above here, it's more likely that the uptrend will continue.
Thanks a lot for this, nice work. And forgive my ignorance in advance.
So if current DXY setup is that of a pump n dump penny stock (and I don’t disagree, it does indeed resemble), from my amateur eyes it looks like the same setup from prior, which was actually followed by a reversal higher no? And not only did it reverse the downtrend and turn higher, but seemed to do so right as the 50 → 200DMA death cross occurred?
Yeah the symmetry is there, I edited what I wrote (I'm so sleep-fucked today. I even forgot about what I talked about 1 hour ago or so.)
Looking at it, the last time it did eventually reversed after the "death cross" (I don't like the term much).
But each time is different and there is no guarantee that it would do the same but it definitely has a potential.
Plus 200MA on monthly is a big support level + a potential double bottom at around 88.285.
I don't think I ever looked another 200MA on monthly in any other chart before..
BTW, here is the daily chart of NKLA.
$DXY doesn't look that bearish as we zoom out to monthly.
I guess we can "thank" the Fed for making $DXY daily chart look like NKLA daily chart.