Weekly blog for the week starting 17th October 2016

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This week is a critical week for USA as a lot of data is due to come out. Third quarter earnings is expected to be no better that the previous quarter, according to most financial analysts. During the first two days of last week, the USD currency continued on an upward move whilst accumulating for the rest of the time. I can see from the weekly time frame chart that there is a retracement that needs to occur at some point. Looking at the daily time frame, it clearly shows resistance at the 98.00 price and support at the 97.50 price area. This sort of pattern that has been forming gives us an indication of the next move, however a headfake may occur before the US Dollar continues appreciating. I am expecting a headfake due to the fact that we see a non-retraced day candle on the 11th October. I will be paying close attention to how the Index Dollar will react to the financial data and I would like to see some correlation between the fundamantal news and technical move. If truly negative data is expected this week out of the USA, then we will see the headfake forming. I will be expecting the Dollar currency to move at the 100.30/50 price area. View the daily time frame below:

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EURUSD currency has made a technical move as I predicted (please go and read last week’s blog). This pair is doing exactly the opposite of the USD currency, however in the weekly time frame I see an ascending triangle pattern which give us a message to buy in the long run. One other thing worth mentioning is that if the currency continues selling, it will negate the previous pattern giving us an unconfirmed rectangular formation which ultimately is telling us that depreciation will continue in the Euro currency vs the US Dollar. Looking at the daily chart I notice the same pattern forming in the USD but opposite.

On Monday of this week, we have Mario Draghi, the president of the Bank of Europe speaking and news traders will pay close attention to what he has to say. An interest rate decision will be made on Thursday which will be followed by the ECB press conference. Volatility is expected on both days. Trade idea: I will expect the EURUSD to continue to sell, however pay close attention to the unretraced candle as shown by the white arrow in the image below. Take profit will be at around the 1.0850 price area.

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By Elkana Roveglia – www.TakeMyTrades.com