Another disappointing jobs report — which last week led to a market rally as it was interpreted as a hindrance to Fed rate hikes. Trade safely.
The dollar chart has my attention today, as DX has completed a Bat Pattern at the key channel midline line. It has failed to advance past the midline five previous times. So, it’s safe to characterize it as an important inflection point. Should it fail again, it has huge implications for USDJPY and EURUSD as well.
The longer-term view:
Yesterday’s USDJPY-driven ramp in the last several hours that took prices back above the H&S neckline puts a dent in our downside case.
Though, I believe there’s still a good argument. Looking at the futures, we can see a well-formed channel, the top of which we will likely test around 10am EST. If the usual morning pump runs its course by then, look for a dump as indicated.
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