With the Fed beating the drum of rate increases, many are looking for the Greenback to fundamentally strengthen. Though when and if the Fed actually increases rates is a debate for another day, let's look at the technical picture for EURUSD.
It appears we are finalizing the 4th wave of a 5 wave diagonal pattern. We're looking for this 4th wave to terminate in the 1.1050-1.1200 price zone, then pivot higher to for a 1.17 retest. Two items can help with the long trigger:
1. Live trader positioning through FXCM - it currently reads +1.01...look for this number to drop to signal a bullish signal
2. A break above the red resistance trend line would signal the mood of the market could be shifting towards bulls.
If this occurs, one could place a stop loss just below the recent swing low while targeting 1.16 for a positive risk to reward ratio.
If prices meaningful penetrate 1.1050, then we'll need to consider the alternate patterns.
Hi Pooya, I actually just published on Gold earlier this morning in DailyFX. In essence, it is stuck in a downward correction and is trading closely with the Fed's rate hike expectations. So long as the rate hike expectations remain a concern, gold is likely seeing lower levels. If rate hike expectations dissipate until after the US elections, that may release the resistance and push the metal higher.
There is minor support near current levels near $1224. Ideally, I would like to see it slide down towards $1190 then see how it behaves around there.
PooyaSalehipour
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thanks dailyfx team. i really enjoy your analysis everytime.
Mizuki32
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Great analysis.
JWagnerFXTrader
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I appreciate your comment Mizuki. Best of luck!
rit29
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when will it reach 1.14..i have buy @ 1.14..will it recover in near future..stop somewhere around 1.10..
need your expert advise..
JWagnerFXTrader
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Hi Rit - I try to stay away from "absolutes" such as EUR/USD will do this or do that. Instead, I'll follow patterns that appear to be the higher probability ones. For example, let's say you are working on a 500 piece jigsaw puzzle. Before you connect your first 2 pieces together, you can't discern what it is.
However, after you get the border and perhaps 25% of the puzzle built, you can begin to draw some assumptions about what the image is. At that point, are you 100% sure what the image is? No, there is still a chance you could be completely wrong.
That is the same way with the markets. Through previous price action, the market is giving us clues. We piece those clues together to see what the picture is. However, our interpretation of what the picture is could be wrong. The EUR/USD analysis above is predicated on an ending diagonal pattern for red 'C' wave. That pattern has rules and guidelines. If that is indeed the pattern, the prices are ripe to bounce higher towards 1.16 and possibly higher. The market could completely tank from here which will negate the diagonal pattern and we'll reactivate alternates.
Thelearner
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JWagnerFXTrader, I Always appreciate your post along with your Elliot Wave breakdowns. I wish we can get more post. Thank you!
JWagnerFXTrader
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Thank you for the kind words Learner. Along a similar vein, in looking at EURGBP, today's low reached an important level that could be a near term bullish pivot. I'll endeavor to post it later tonight or tomorrow. Cheers!
Thelearner
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Thank you. I'm consistently on DailyFX as well. I'm expecting the turn to come at 1.111 but entering at an upper break.