I am looking to get back in on the dollar bull run. I have posted on Friday a chart on the DXY explaining why I believe this is the end of the correction. Today, I am more certain about it. Here's why :
ON the left side the Euro Contract is overbought as you can see on the Force Index which is out of the channel. This is an overbought condition on a trend during which, the dollar gained about 30%. Overbought conditions in such downtrends should be sold without hesitation. If this week will turn the impulse blue, I will probably end up doubling my dollar position which is about 400% at the moment.
The major signals are on the daily chart (and 4H which I chose not to publish for more clarity). On Friday the Prelim UoM Consumer Sentiment came very very weak and what looked like a good day for the dollar reversed completely and closed weak (good for Eurusd). Surprise surprise, on Monday, all that momentum was lost and the dollar had a great day across the board. This is the Friday - Monday momentum lost which I described many times on my charts, it is a great signal, especially when it goes with the bigger trend.
The divergence is not great here, but it looks good on the 4H chart or other dollar daily charts such as USDPLN, USDILS, USDHUF for example.
My outlook for the future is that if the data from the US gets better, the dollar will roar. If Greece has a default, the Euro will collapse. If Greece gets a bailout extension, it will probably be a buy the rumor sell the fact type of trade, which is what happened last time and I made good money on that. These are of course some scenarios that I play in my head, I do not consider them certainties. The only thing certain is that the dollar is in a great trend which is obvious if you look at any chart and that what happened since the 18th of March (when I called for a pause on the dollar trend by the way) does not look like a top, and rather a shakeout/consolidation.
Parity is coming! Do not fight one the greatest trends.
ON the left side the Euro Contract is overbought as you can see on the Force Index which is out of the channel. This is an overbought condition on a trend during which, the dollar gained about 30%. Overbought conditions in such downtrends should be sold without hesitation. If this week will turn the impulse blue, I will probably end up doubling my dollar position which is about 400% at the moment.
The major signals are on the daily chart (and 4H which I chose not to publish for more clarity). On Friday the Prelim UoM Consumer Sentiment came very very weak and what looked like a good day for the dollar reversed completely and closed weak (good for Eurusd). Surprise surprise, on Monday, all that momentum was lost and the dollar had a great day across the board. This is the Friday - Monday momentum lost which I described many times on my charts, it is a great signal, especially when it goes with the bigger trend.
The divergence is not great here, but it looks good on the 4H chart or other dollar daily charts such as USDPLN, USDILS, USDHUF for example.
My outlook for the future is that if the data from the US gets better, the dollar will roar. If Greece has a default, the Euro will collapse. If Greece gets a bailout extension, it will probably be a buy the rumor sell the fact type of trade, which is what happened last time and I made good money on that. These are of course some scenarios that I play in my head, I do not consider them certainties. The only thing certain is that the dollar is in a great trend which is obvious if you look at any chart and that what happened since the 18th of March (when I called for a pause on the dollar trend by the way) does not look like a top, and rather a shakeout/consolidation.
Parity is coming! Do not fight one the greatest trends.
