Good Evening Traders and Investors.
As the equity markets have rallied and have now gone sideways over the paste few months, the dollar has begun to show some strength. I know, I know, the trend in the dollar is still DOWN and the trend in equities is still UP (until further notice) but there are some signs of trend changes/reversals.
In the charts below, can you detect any chart patterns or failures in SEQUENCE that can be a safe entry going counter trend?
As you can see, there has been a direct relationship between the weakening USD and the strenghtening equity markets over the past 9 months, BUT there are signs of strength in the greenback. I am NOT saying the trend is over, but trendliens, double bottoms and overall sequence change are beginning to appear (see USD/CAD and NZD/USD.
The dollar is making higher high and higher lows against both the CAD and NZD. This clearly shows up in both pairs as the dollar is significantly higher since bottoming in October. The equity markets have gone relatively sideways since October – if you recognize this relationship, you can find low risk opportunities in the forex markets and cover your long portfolio in the equity markets with covered calls.
See you in the morning for The Local’s Daily Commentary and The Local’s Take: Mid-Day Forex Update
Happy Trading and Be Environmentally Cool
Jupiter Peak Financial
