Futures are pointing up, the US dollar’s vacillating, the USDJPY got the bounce — could be another positive Tuesday. We’ll go long on the opening, with the yellow H&S neckline and red midline as our target.
UPDATE: 09:36 AM
Just reached the intersection and will go full short at 1645.55. The .618 of the drop from 1661.91 is a little higher at 1646.94, so I might be a little early.
It all depends on whether the white or the red channel is in charge. The top of the white channel is appealing at 1653.53 (the .786), so I’ll take any move through 1647 as a signal that it’s in play rather than the red midline. And, though there’s room for interpretation, the rising purple channel midline appears to be closer to the .618 as well.
The falling white channel has the benefit of three tags on the upper bound and a lower bound that perfectly captures the 1.618 extension of the initial drop from 1674 to 1640 where it intersects with H&S target (1608) and the bottom of the large purple channel later today.
But, the red channel lines up well with some important reversals as well as the two bottoms made yesterday and back on May 23. A reversal here at its midline would support its dominance.
Pulling back a bit, it’s obvious that either channel can get us to the bottom of the rising purple channel. The question is when, and at what price.
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