My take on today’s coordinated central bank EUR/USD and Dow rally

It’s tough to pinpoint exactly at which point the exhaustion from today’s RISK ON rally will begin. It’s even tougher (on a day like today) to shift the focus to three specific charts where there is a downtrend (EUR/USD), an uptrend (U.S. Dollar Index), and no trend (the Dow Jones Industrial Average). But these are the dominant market trends and they must be respected.

These three markets could very well be in the midst of a sharp correction and if so there is a solid argument to be made that the exhaustion is already showing up with the move lower from 1.3532 in the EUR/USD, a bounce from 78.01 in the U.S. Dollar Index, and a rejection from the 200 day Simple Moving Average and 11,998 in the Dow. By the way, note the 78.00 and 12,000 major psych levels in play in the dollar and Dow respectively.

In the video I’ve recorded here, I explain what I expect in these three markets to do as the reality of the European (longer-term) scenario begins to seep back into the markets.

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