Happy Friday, everyone!!! Hope you guys had a great week, and you’re getting ready to enjoy Labor Day Weekend. Let’s not forget what this weekend is about; especially given the events over the last couple of weeks.
Given that summer is, essentially, over, we should anticipate volume coming back into the markets, beginning next week. It’ll more than likely be volatile for the first week or two, but that’s nothing out of the ordinary.
I want to first look at the EURUSD’s weekly chart, then move to it’s daily chart, and talk about what I see. That’s going to be the format for all the instruments I look at in this post. If you like how I do things, please share with your friends/colleagues/whomever.
The weekly candle, for this week, was held up at the 1.1900 level (the solid yellow line). The price action over the last three weeks indicates that it could keep moving north; ultimately reaching the 1.20945 level (indicated by the red Fibonacci level [76.4%]).
The daily chart on the EURUSD, shows a different scene, in the short term (obviously). It was stopped right at the 1.1900 level (yellow line). Base on the price action, we may see a pull back towards (if not touch) the 1.1750 level (solid blue line). It may not reach that level, but it will contend with that level. The 1.1900 level on the daily chart, also happens to be the 200d ema (in my analysis, that’s an important indicator); as well as the 76.4% fib level – another important indicator.
For the short term (1 – 2 weeks), I’ll be looking for a pullback in the EURUSD, before heading back up. As I’ve always said, no market moves until the USD moves. When the EURUSD is strong, that means the USD is weak, and vice versa. Whatever direction the EURUSD moves, you can anticipate the US equity markets following suit.
The AUDUSD’s weekly price action shows bullish movement in the upcoming weeks; no different that the EURUSD. I use the AUDUSD as a foreshadow as to what Oil (CL) will do, which leads to trades I’ll take on the Natural Gas (NG).
The weekly price action was strong, and has been the last two weeks; where last week it completed a bullish engulfing pattern, and was confirmed this week with its run up above my favorite ema’s. It’s broken above, with conviction, the .7350 level (solid green line), and doesn’t show much resistance until it reaches the .7750 level (solid white line). There could be some resistance at the .7625ish level, but I believe the momentum & strength by the time it gets there will be too strong for it to hold back a move higher.
As with the EURUSD, the AUDUSD’s daily chart shows price action indicating that it could see a small pullback in the next week or two; but ultimately, goes higher. The AUDUSD was rejected at it 200d ema (solid white line, and purple trend line), after a week of strong runs. I see this strength deflating, and eventually coming back to the .7240 level. Once that level is touched, I believe the cross will bounce and make more bullish moves. And ultimately reaching the .7750 level (based on the weekly analysis).
As I mentioned above, the AUDUSD is, to me, an indicator to what Oil & Natural Gas will do. It ‘s not always spot on, but the probability of those commodities moving in the direction indicated by the AUDUSD, is very high. And when it comes to CL & NG, the probabilities are very high that when CL moves higher, NG will fall. So, for example, if I think the AUDUSD (or the AUD futures contract) will move higher, I will place a buy order on AUDUSD & CL, while selling/shorting NG.
Have a safe and enjoyable weekend. As I asked above, if you like the content of this post, please share with others who may be interested in content like this. Until next time, have a great day!!!
This post, and it’s content, is not financial advise, I’m not a financial planner; this is just how I trade. Please consult your financial advisor when it comes to trading in high risk securities.