This past week, as expected by many of us traders, the Fed hiked interest rates at 0.25%. The Dollar Index reacted in a bullish way as was anticipated. In my last blog, I mentioned two possible patterns that the Big Boys were creating in the Dollar Index: a Harmonic pattern or a Head and Shoulder. In the weekly time frame chart, the Head and Shoulder is not as visible as it is in the daily time frame chart, however in the image above, you notice that the price is nearly at the top of the uptrend resistance.
I will be looking to see if the market makers either just reject from the resistance marked by the red trend or if they create an inverted pattern to communicate the reversal. In the meantime, the short-term move I see is a buy continuation at least until the top of the trend.
In my last week blog and vlog, I disussed the risk involved in buying the EURUSD prematurely because of uncertainties in the Dollar currency. My concern was realized and the EURUSD ended up breaking a long hard support. As per the Dollar Index, the EURUSD has some selling space within the downtrend before it hits the trend support. According to the Euro fundamental news, there is no high impact news that can make the EURUSD rock in either direction this coming week. All of the high impact news will be from the USA front which will still produce some volatility in this currency pair.
Trade idea: I will continue to look for sell opportunities in the above currency pair. First sell target is @ 1.0300. If the price continues its descent I will be looking at a second target price area @ 1.0200. There is a probability of not making any of these two levels if the Dollar Index starts its downwards correction.
Written by Elkana Roveglia – www.TakeMyTrades.com