The US Dollar, Euro & GBP

The US Dollar remains strong still, even as the Euro has flirted with a price pivot area as described in yesterday’s post.

usd

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The present upswing was detected early as shown by the green circle at the 94.00 price area.

With an upside target at 99.00 (the red rectangle above the present prices) still open as a possibility and a support price level at 96.00 (represented by the orange rectangle below the present price action), we find the present US Dollar prices are poised right in the middle of these two action points.

Combine this information along with yesterday’s post showing the EUR/USD testing it’s resistance price points at 1.10 and we have some seemingly contradictory information.

eurusd

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The Euro and the US Dollar are a forex pair and so, must move opposite to each other on the charts.

To attempt to make sense of the markets at the moment, the fact that we see the Dollar mid-way in a rising trend and, not really all that close to testing the limits of it’s present trend direction, provides us with a valuable clue.

It seems that of the two currencies, the Euro is currently the stronger near the top of it’s range and that the US Dollar may be sputtering out from it’s driving uptrend.

To further this conclusion, let’s look at another forex pair containing the Euro and see how that measures out.

Let’s look at the EUR/GBP:

eurgbp

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Here, we again see strength and a market up against it’s resistance price area (shown by the red bar above the price action).

However, the Daily trend has already turned upwards for the EUR/GBP while it hasn’t turned upwards for the EUR/USD yet. This implies that the EUR/GBP may well be the lead forex pair for the next leg upwards for the majors (excluding the US Dollar).

Price resistance points in an uptrend (tops) usually provide market makers with SELLING opportunities which drive the price into a pullback before attempting the next surge upwards.

But, at the point where complete price bars of sufficient time period (like the 1-hour bars on the charts) are able to break through the resistance points and go to new highs, strategy favors a BUYING STRATEGY rather than the usual market makers bracket plays. – George

 

  • May 29, 2015