September Eurocurrency – The euro reached a one-week high against the dollar on Thursday, after the euro zone’s two biggest economies posted surprise returns to growth in the second quarter. The three-day rebound has the September Eurocurrency futures trading inside the 60% sell window and retesting the new downward sloping parallel resistance line. The market is forming a potentially bearish TR pattern that could confirm a significant high for the Eurocurrency futures. Sell the September Eurocurrency futures at 1.4199 stop, with a stop loss above the prior swing high, marked as (B) on the chart.
September British Pound – After reaching a new high at 1.7043 on August 5th, September British pound futures reversed and traded down to 1.6429 on the projected swing date of August 10. From this low, the British pound has made a weak rebound to retest the 20-day SMA. The British pound has formed a potentially bearish reaction swing, but needs a trade below 1.6385 to confirm the sell pattern, with a target objective of 1.6150. The next swing trade date (reversal date) is August 19.
September Dollar Index – The dollar declined, after a report showed U.S. retail sales unexpectedly fell last month, adding to concern that the nation’s consumers remain reluctant to increase spending. The September Dollar index has completed the long-term reaction cycle and appears to be forming a bullish TR pattern. The TR pattern (Trend reversal) typically forms at major highs or lows. The Dollar index posted a swing low on August 5th, followed by a three-day rally into August 10, where it formed a swing high slightly above the 20-day. From this high, the market has pulled back to the 60% buy window, as it approaches the August 17 reversal date. I’ll wait to see if the market will give me a pattern confirmation before entering a long position.
