I’m returning to the on-going discussion we’ve had regarding the Channel Up, mark up trend, and the swing buy I’ve been watching/waiting on the 240-minute EUR/USD. On April 26 and 29 I brought up my strategy for a swing buy and also my shift to an intraday entry because of the near-term support that the EUR/USD is seeing.
The U.S. Dollar Index cannot be ignored as the 73.00 level has proved to be a more persistent support level as buyers haven’t abandoned the “00″ and this is putting the resistance between 1.4880 and 1.4900 as the near-term upside obstacle.
While I don’t feel there is any support for a floor being put in on the dollar, I must also mention that “bottom picking” is not my goal. In fact, if there is a bottom in the dollar, I am more interested in whether there is enough bullish momentum to drive the dollar higher through 76.00 where I think the downtrend will be broken. Until then I think dollar bears will continue to sell into rallies because of the strength of this established downtrend. The 240-minute U.S. Dollar Index has reached the initial levels of a longer-term intraday swing short as prices have hit the 20 period SMA.
In turn this could support the correction lower into 20 period SMA support on the 240-minute EUR/USD. Along with the support of the 34EMA Wave there is an uptrend line from the Channel Up pattern that has held on the pullback.