As I have mentioned for a few weeks now, the daily chart of the U.S. Dollar tells the story of the current Dollar weakness and why this is not the time to be thinking "reversal". Again this shift to the downside was confirmed on October 26th.
As long a prices are trading below the three lines of the Wave, this dynamic resistance level will guide prices lower. There are some support levels that could test this push lower: the first is the 85.00 level and then the two horizontal support levels at 84.67 and 84.42.
Intraday the Dollar is in a sideways congestion pattern as the triangle that contains the current range is tightening.
Two markets are showing a potential breakout opportunities are the daily USD/JPY and the 240 EUR/USD.
The Yen has actually confirmed a break to the upside with the pierce of the downtrend line and at the positive MACD Histogram reading. Support for this breakout waits at 117.50 and the uptrend line; they're both good choices for a stop-loss.
The 240 Euro has a triangle that has formed and with the battle that is going on at the 1.2800 level, if the "00" can establish itself as support, there's a good chance that prices can rally to test the resistance of the downtrend line and potentially break the triangle to the upside. If this sets up, look for Dollar weakness at the Dollar will have to weaken to see the break to the upside follow through. If the Euro happens to weaken, keep an eye on a swing buy opportunity at 1.2762 which is the top line of the Wave on the daily chart.
All charts are done on eSignal Premium with the EZ2 Trade Software Collection. www.ez2tradesoftware.com
Raghee Horner is an trader with more than 15 years' experience in the markets. Ms. Horner has taught her brand of technical analysis and charting strategies to students all over the world. She is also the author of the bestselling "Forex Trading for Maximum Profit" and "Thirty Days of Forex Trading". Emphasizing charting and price action and continues to teach the tools and strategies that encourage self-directed traders to pursue the study of chart analysis and market psychology. She is a much sought after public speaker who has conducted seminars in the US, Canada, the Caribbean, and Asia. For more information on Raghee's analysis and trading email cs@raghee.com or visit www.raghee.com.
