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This financial week, the majority of traders and financial analysts will be focused on Wednesday 7pm London time when Yellen (FED) announces the expected hike in interest rates. The Big Boys or ‘market makers’ have constructed the technical market to go in either direction. I explain in my weekly vlog that the market is ready to either create a Head & Shoulders or a harmonic pattern (Crab or Bat). If the Head & Shoulders prevails then expect a corrective reversal in the US Dollar Index which will cause depreciation. If instead, the bullish harmonic pattern prevails, you can still expect a short depreciation in the market but with the view to continue the uptrend in the Dollar currency. If the bullish Bat harmonic pattern is confirmed, I will be starting to look for a support (buy) at the 97.45/50 price area; but if the bullish Crab is the pattern that the Big Boys are creating, I will look for a further depreciation at the 93.70 price area.

EURUSD

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Last week, as foreseen by many financial analysts including me, the Italian referendum came out negative with a NO win. As I predicted, the EURUSD depreciated suddenly but did not break the support area marked by the blue horizontal line in the photo above. We then had no change in the ECB interest rate and a continuation of QE (Quantum Easing) is expected until at least March 2017. All of this negative news did not cause the EURUSD to break the support area which sends a strong message to traders and analysts that a short- term appreciation is expected in the EURUSD. This week will be another critical week for the EURUSD with the decision of the FED and the potential interest rate hike. A hike in the USA interest rate system should produce a volatile sell move in the Dollar Index which should imply a buying opportunity in the EURUSD. In my weekly vlog I specifically talk about a possible pitfall in buying the EURUSD prematurely, which might result in a loss for many traders. A better trading opportunity could be to wait for Wednesday, see the market’s reaction and then take a trade position.

Trade idea: I will be waiting for the FED interest rate decision and for the end of Yellen’s press conference. A hike of 0.25% should give us a good buy opportunity in the market. If the Dollar Index confirms the bullish harmonic pattern that I have explained in my weekly vlog, I will want to place a stop loss below the 1.0450 price area and start buying. REMINDER: the buy move will not be the dominant move but just a correction for more depreciation in the long run. I will confirm the depreciation in the EURUSD in the weeks to come.

Written by Elkana Roveglia – www.TakeMyTrades.com