All eyes on the Dow and Dollar…but watch the EUR/USD

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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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  • rockandroll

    Queen Cleo- you sure got my attention— wish i’d read this when it came out nine days ago!

  • rockandroll

    Queen Cleo- you sure got my attention— wish i’d read this when it came out nine days ago!

  • AlextheGr8

    Maybe the FOMC minutes will breathe some life into the dollar. The NY session should be an interesting one. What are your thoughts? And I thought Obama winning the Nobel would solve the USD’s woes. Ok, that was a joke, for those of you wondering. :)

    The Dollar was down versus most majors as global reserves shifting away from the Dollar and demand for higher yielding assets kept dragging it lower. NASDAQ closed almost flat with 0.04% and Dow Jones declined by 0.15% , Crude rose by 1.2% to a 7 week high closing at 74.89$ a barrel as global demand is expected to rise. Gold (XAU) gained by 0.71% closing at $1063.9 an ounce on the weaker Dollar. Today, Retail Sales are expected weaker with -2% versus 2.7% prior. FOMC’s Meeting Minutes will be released, providing insights into the economic conditions. Federal Budget Balance will be released and is expected better with -77.3B versus -111.4B prior.

    EUR/USD

    Resistance
    1.49
    1.4955

    Support
    1.479
    1.476
    1.4735

  • AlextheGr8

    Maybe the FOMC minutes will breathe some life into the dollar. The NY session should be an interesting one. What are your thoughts? And I thought Obama winning the Nobel would solve the USD’s woes. Ok, that was a joke, for those of you wondering. :)

    The Dollar was down versus most majors as global reserves shifting away from the Dollar and demand for higher yielding assets kept dragging it lower. NASDAQ closed almost flat with 0.04% and Dow Jones declined by 0.15% , Crude rose by 1.2% to a 7 week high closing at 74.89$ a barrel as global demand is expected to rise. Gold (XAU) gained by 0.71% closing at $1063.9 an ounce on the weaker Dollar. Today, Retail Sales are expected weaker with -2% versus 2.7% prior. FOMC’s Meeting Minutes will be released, providing insights into the economic conditions. Federal Budget Balance will be released and is expected better with -77.3B versus -111.4B prior.

    EUR/USD

    Resistance
    1.49
    1.4955

    Support
    1.479
    1.476
    1.4735

  • foreXmarket09

    Look at this chart form broker ACM
    http://files.ac-markets.com/Newsletter/2009-10-20/AlertChart20Oct09_0906.png
    The euro is unstoppable today and it’s clear it will get to 1.5 very soon!!!!
    Get your platforms ready traders!!!
    Regards

  • foreXmarket09

    Look at this chart form broker ACM
    http://files.ac-markets.com/Newsletter/2009-10-20/AlertChart20Oct09_0906.png
    The euro is unstoppable today and it’s clear it will get to 1.5 very soon!!!!
    Get your platforms ready traders!!!
    Regards

  • mich

    I take a different view from you guys. I believe EUR will be giving ground to USD and we will be seeing downtrends at 1.4829, 1.4762 and possibly 1.4695. The reasons in my opinion is possible end of EW Wave 5 on yesterday’s high and with the sign of today’s hanging man candle. As usual time would tell.

    Cheers

  • mich

    I take a different view from you guys. I believe EUR will be giving ground to USD and we will be seeing downtrends at 1.4829, 1.4762 and possibly 1.4695. The reasons in my opinion is possible end of EW Wave 5 on yesterday’s high and with the sign of today’s hanging man candle. As usual time would tell.

    Cheers