Firstly, let me start by apologising for the slight delay since my last post! Due to being in Mexico I haven’t traded much and also been extremely busy meaning I simply haven’t had a chance to blog but I am now back and I am taking a keen interest in the potential USD strength coming over the next few days/weeks.
In recent times the Dollar index has had quite a large fall following months of continued strength and in this time has had very few pullbacks. Of course being the largest economy this has had a very obvious effect on USD based pairs and has brought a reversal in some of the long-term trends, in most cases bringing pairs to levels not seen for a couple of years.
Looking at the recent price action on the Dollar Index below we can see that bearish trend I am talking about but you will also notice that we have had a very nice rejection of the 94 level which catches my attention straight away.
While I don’t trade the Index directly this acts a strong indicator on USD pairs so i have been analysing them to see if they are showing the correct signs and the most obvious would be USD/CAD as it’s almost a mirror image!
You can see from the chart above price has decelerated in to 1.2510 level beautifully and this has earned the place on my watch list for the coming days to see if we get the entry I am looking for. As you know from previous posts I will be now monitoring closely on lower timeframes to find the entry that will give a great risk/reward on the trade and in turn give us some nice profits.