Juxtaposing the global
slowdown and the near-term earning seasons means that there could be near-term
support amidst a pessimistic backdrop. There are some signs that the 200DMA is
continuing to hold and even through the Dow is down triple digits this morning,
the chop on the daily Dow chart indicates prices are reaching a layer of
support.
Add to that the 50DMA on the daily
S&P and the major psychological level ceiling at 84.00 on the U.S. Dollar
Index there are a few scenarios I am entertaining both long and short-term. One
of the main stories of course is Fed’s wait-n-see attitude which the market did
not like but was none-the-less able to recover from into Wednesday’s close.
This morning is another story as equities are pressing lower into post-Fed
Minutes lows.
Past performance is not indicative of
future results
The
Dow is testing buying support at the 200DMA. The move lower through 12,500 did
cross a major psychological “line in the sand” and this momentum could carry
the index lower. The question is how much will the current sideways market chop
effect the possibility that the index will reach an “oversold” area along prior
lows between 12,384 and 12,376. If the Stochastics (21, 1, 3) dips below a 20
reading, look for a potential buying opportunity. Big caps tech like IBM are a
serious drag on the market.
Past performance is not indicative of
future results
The
U.S. Dollar Index “flight to safety” has halted at 84.00 even with the Dow’s
weakness. Partly given a reprieve from the Fed yesterday, the dollar is not
reflecting any strong discounting of QE/stimulus/Fed action. With the steady
stream of green GRaB candles and a fresh “twelve to two o’clock” uptrend, I am
still bullish on the greenback. Only the yen is outpacing the dollar’s strength
Thursday morning.
Despite the aussie’s weakness on today’s
“risk off” and the disappointing Employment Change, I still like the Australian
dollar’s potential to rally against the Canadian dollar and therefore still see
today’s correction to the daily 34 period EMA high as a swing buy trigger. The
current storyline of a U.S. stall is a drag on the Canadian economy as is the
weak to flat crude oil market; this all does temper the expectation of the BOC
hiking rates in September and I do feel quite a bit of that expectation has
already been “baked into the cake”. If risk does come back on, the loonie has
been slower to react than the aussie and therefore I see the aussie continuing
to outperform. Stepping back to look at the dominant trend in the pair, the
daily shows the green GRaB candles, and “twelve to two o’clock” angle of a
healthy uptrend. The downside? Today the pair has dipped below the 200 and the
20 daily moving averages in order to reach the 34 period EMA high.
Past performance is not indicative of
future results
The
daily AUD/CAD has pressed lower through the aggressive swing buy entry at the
20 period SMA close. The beauty of an aggressive or “aggro” entry is that no
more than 1/3 of the total position size for the trade should be entered at
this price which leaves plenty of power dry for a second entry at the
conservative level which always represents a more sizable correction of the
trend.
As an
active forex trader and Chief Currency Analyst for InterbankFX.com I do write
for a number of sites all over the web and I am happy to say that I will be
posting updates atwww.IBFXconnect.com. MyActivity Boardwill feature the trades from my trading account as well as
intraday commentary.
Start the discussion! Questions?
Comments. Leave it here at the Daily Forex Trading Edge for Raghee to
personally answer. Using the icons at the top of the article to forward this
update to a friend via email, post it on Google or Facebook or simply print it
out for reading later.
Forex trading is one of
the riskiest forms of investment available in the financial markets and
suitable for sophisticated individuals and institutions. The possibility exists
that you could sustain a substantial loss of funds and therefore you should not
invest money that you cannot afford to lose.
Posted By:
Raghee Horner
Raghee Horner, chief currency analyst for IBFX, provides her personal daily trading tips and insights through Dailyforextradingedge.com. An experienced trader with over fifteen years in the markets, Raghee is the co-founder of EZ2Trade Software and has taught her brand of technical analysis and charting strategies to students all over the world. She is an international author and has taught currencies, futures, and equities trading for over a decade.
Juxtaposing the global slowdown and the near-term earning seasons means that there could be near-term support amidst a pessimistic backdrop. There are some signs that the 200DMA is continuing to hold and even through the Dow is down triple digits this morning, the chop on the daily Dow chart indicates prices are reaching a layer of support.
Add to that the 50DMA on the daily S&P and the major psychological level ceiling at 84.00 on the U.S. Dollar Index there are a few scenarios I am entertaining both long and short-term. One of the main stories of course is Fed’s wait-n-see attitude which the market did not like but was none-the-less able to recover from into Wednesday’s close. This morning is another story as equities are pressing lower into post-Fed Minutes lows.
Past performance is not indicative of future results
The Dow is testing buying support at the 200DMA. The move lower through 12,500 did cross a major psychological “line in the sand” and this momentum could carry the index lower. The question is how much will the current sideways market chop effect the possibility that the index will reach an “oversold” area along prior lows between 12,384 and 12,376. If the Stochastics (21, 1, 3) dips below a 20 reading, look for a potential buying opportunity. Big caps tech like IBM are a serious drag on the market.
Past performance is not indicative of future results
The U.S. Dollar Index “flight to safety” has halted at 84.00 even with the Dow’s weakness. Partly given a reprieve from the Fed yesterday, the dollar is not reflecting any strong discounting of QE/stimulus/Fed action. With the steady stream of green GRaB candles and a fresh “twelve to two o’clock” uptrend, I am still bullish on the greenback. Only the yen is outpacing the dollar’s strength Thursday morning.
Despite the aussie’s weakness on today’s “risk off” and the disappointing Employment Change, I still like the Australian dollar’s potential to rally against the Canadian dollar and therefore still see today’s correction to the daily 34 period EMA high as a swing buy trigger. The current storyline of a U.S. stall is a drag on the Canadian economy as is the weak to flat crude oil market; this all does temper the expectation of the BOC hiking rates in September and I do feel quite a bit of that expectation has already been “baked into the cake”. If risk does come back on, the loonie has been slower to react than the aussie and therefore I see the aussie continuing to outperform. Stepping back to look at the dominant trend in the pair, the daily shows the green GRaB candles, and “twelve to two o’clock” angle of a healthy uptrend. The downside? Today the pair has dipped below the 200 and the 20 daily moving averages in order to reach the 34 period EMA high.
Past performance is not indicative of future results
The daily AUD/CAD has pressed lower through the aggressive swing buy entry at the 20 period SMA close. The beauty of an aggressive or “aggro” entry is that no more than 1/3 of the total position size for the trade should be entered at this price which leaves plenty of power dry for a second entry at the conservative level which always represents a more sizable correction of the trend.
As an active forex trader and Chief Currency Analyst for InterbankFX.com I do write for a number of sites all over the web and I am happy to say that I will be posting updates at www.IBFXconnect.com. My Activity Board will feature the trades from my trading account as well as intraday commentary.
Start the discussion! Questions? Comments. Leave it here at the Daily Forex Trading Edge for Raghee to personally answer. Using the icons at the top of the article to forward this update to a friend via email, post it on Google or Facebook or simply print it out for reading later.
Forex trading is one of the riskiest forms of investment available in the financial markets and suitable for sophisticated individuals and institutions. The possibility exists that you could sustain a substantial loss of funds and therefore you should not invest money that you cannot afford to lose.
Raghee Horner