The Dollar Accelerates Through 78.00

This move has been one that has been setting up for some time: The U.S. Dollar Index’s slide through 78.00. The break through this psychological level confirmed the negativity of the dollar’s place in the world amidst a surging euro and worldwide equities risk appetite. However the pierce of 78.00 did not attract the selling momentum that would be expected to have accompanied this move lower. The Fed was not able to curb dollar selling with last week’s rate statement and the dollar was left to rely of the bulls who would step in at 78.00 to 77.80 to stay supported.

The EUR/USD which has been climbing since the brief break through 1.3000 on January 10 finally has managed to take all that bullish sentiment and momentum and transition the 34EMA Wave into an uptrend. The GRaB candles show the green shaded candles that confirm the bullish momentum and what seems like an inevitable test of 1.3800 which had been resistance preventing the bulls from finding solid footing above the “00” until today and the acceleration through 78.00 on the dollar.

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There is little doubt that the intraday time frames are ripe for swing entries in my opinion, and since the Directional Bias of the EUR/USD is bullish, even the 60 and 240-minute swing buys are in play. (Only the 60-minute chart is in the correct market trend for this entry however for now.)

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The GBP/USD is continuing higher from the swing buy on the daily which was outlined here at the Daily Trading Edge. In fact this one-thing-leads-to-another set up was created by the lackluster GDP number that initiated a sell-off that drove prices to daily support waiting at the Wave. The transition to the uptrend was fresh however the Wave was already offering support between the 34 period EMA high and 34 period EMA close.

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Near-term set ups that are following the move higher can be taken advantage of the intraday time frames. My preference is for either the 30 or 60-minute chart, which both have a “twelve to two o’clock” Wave angle and are showing clarity; a prerequisite for a swing entry. The 34EMA Wave is smooth and established. The only unknown is whether prices will rest on the support of the Wave when a correction of the intraday uptrend occurs.

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