What I’m doing with today’s dollar pullback.

My trades have in some way been influence by the U.S. Dollar Index’s continued uptrend, just over two weeks ago I wrote why that the pullback to the 20 period SMA close was simply a correction and that the greenback would continue its bullish ways. And it did.

So here we are again, another pullback within the context of what is still an uptrend. This time however I am going to be a little more cautious about my upside expectations. I still expect there to be support within the 34EMA Wave however I am concerned about the ability for the greenback to press to higher highs; there was a great deal of congestion in front of today’s correction and for that reason there is a greater chance of a market trend transition into perhaps distribution.

Remember that the U.S. dollar is still in an uptrend so to be bearish HERE would be premature and unjustified.

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The U.S. Dollar Index has pulled back to the support of the 20 period SMA close this morning on more bullish headlines out of Europe. This trend in the euro is headline driven so then question then is will be if the IMF is unsuccessful in getting and then lending (up to) another $500 billion, could this be where the euro’s climb ends? In other words, has the short-term risk picture improved as much as it’s going to?

If so, the timing would put the EUR/USD right at the 20 period SMA close resistance within its daily downtrend.

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The daily EUR/USD will trigger a trend-following swing short as prices rally into the resistance at the 20 period SMA close and the 34 period EMA low.

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  • Raghee Horner

    The previous exhaustion area was between 1.2877 and 1.2867. I think any just below 1.3000 can be shorted although it’s a bit “aggro”.

    • Eric Wa Lerato

      eurousd has totally miss behaved today though there was a strong support at 26xx level. if today we close on daily chart above 20 sma the trend will be up for awhile ….
      watch daily chart to trade with the trend

  • Raghee Horner

    Another day of positive headlines has helped the euro gain against the dollar but it’s still just a near-term risk appetite rally until we can string together a few more rallies on data and break some key price levels (1.3000 in the EUR/USD and 80.00 on the Dollar Index).

    Be cautious of looking at three up days as a “trend” – I do agree there is significant momentum, but the (daily) trend and therefore Directional Bias is still firmly bearish for now hence my swing short set up.

  • Raghee Horner

    Im editing a video tonight that I will post here tomorrow as a follow up to the recenet price action in the EUR/USD, U.S. Dollar Index, and Dow Jones. It will compliment this post well and show where my heads at now that the momentum in the EUR/USD has carried the pair to a 1.3000 break.

  • Ilya Gruntal

    Ever heard about reverse..?

  • Harsimran

    I am Very eager to know that how come ur chart shows diffrent colour candel and what all averages do u use.