Correlations are my thing…and when it comes to playing the EUR/USD the Dow and the U.S. Dollar play a big part. Today’s Dow sell-off has taken prices to some key levels, namely the 34ema Wave support on the daily. The Dollar has not been able to take out the 73.33 resistance and this should create a floor on the Dow.
With that in mind the pullback on the EUR/USD (above) has found support within the Wave and specifically the 50% Fibo level. The U.S. Dollar ceiling — if it holds — should allow the EUR/USD to bounce from 1.4516 which is just north of the key 1.4500 psychological level.
Prices did break the uptrend line support of the channel up pattern on this chart but since the 34ema high is just below it, the two combined create more of a buying zone. IF there was more room between the uptrend line and the 34ema high there could have been an opportunity to play the gap between the two. But with today’s EUR/USD weakness there were much better and lower risk shorting opportunities across shorter term intraday charts like the 30 minute. (below)
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