Good evening team,
Crazy week with the USD devaluation continuing. Markets are ignoring the major news headlines across the globe and continuing the risk on mode. However, it appears as though we may have reached a bottom with the DXY breaking out of a descending wedge/channel.
DXY – Daily Charts
DXY – 4 Hour Charts
The DXY is fast approaching the 1.27% FIB Extension, there is a very sharp descending channel/wedge. A break to the upside of the wedge will suggest some strength returning to the USD.
We are looking to position ready to catch that move.
EURUSD – 4 Hour Charts
Elliott waves theory is very subjective, however it is based on a 5 wave principle.
EUR now has a bullish bias, however we are expecting a pull back lower once we see a break of the wedge formation. Wave 4 generally retests the top of wave i meaning we can target the 1.1025 level.
Trade Setup: SELL MARKET EXECUTION – Entry price 1.1195, stop loss 1.1250 and take profit 1.1030.
Stop loss: 55 pips
Take profit: 165pips