Breaking down today’s risk appetite

…dare I say potentially short-lived risk appetite??

Today, after what is looking like a very bullish open and a bad day for the dollar, I wanted to reexamine the uptrend in crude oil and if the aussie and loonie would follow that strength or if today’s price action was going to be more about the dollar’s weakness.

Thus far, into what has been a very strong day for the U.S. equities, my opinion remains the same: A strong holiday weekend of shopping (record-breaking actually) and bullish headlines (read: optimism) from Europe have fueled risk appetite…today.

The EUR/USD is far from any kind of downtrend transition, and arguably, the momentum (for today) has played out and is already exhausting. A confirmation of that was the 240-minute 34EMA Wave remaining unbroken as the EUR/USD climbed.

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  • Digital Gypsy

    Oh how I’ve missed your videos!! :-)  Great stuff.  Peace!

  • Raghee Horner

    We’re entering an unusual period where correlations may behave unusually. I think the Dollar Index could remain above 78.00 AND the Dow could strengthen because of Europe (short-term optimism vs. longer-term doubt) but this would be only for a short while. This sets up some interesting plays in the AUD/JPY which is benefiting from a strong aussie as well as the risk appetite in equities.

    The 240-minute EUR/USD chart I mentioned in the update was tested and pierced but remains resistance. However the resistance of the 34EMA Wave   is losing its relevance for this time frame since the market trend is transitioning into a more sideways direction thus perhaps ushering in distribution and some increased volatility.

  • PureMuscle

    Hmmm, the risk appetite is continuing today… not as short-lived as most would have thought.

    • Digital Gypsy

      short-lived doesnt necesarrily mean one day…it could be 2 or 3 ;-)