Consolidation rules the dollar
With holidays in Japan (Sports Day), the U.S. (Columbus Day), and in Canada (Thanksgiving) a large part of activity will be missing from the market;Â nearly 30 percent of total daily turnover.
It’s not surprise that this morning brings consolidation on many of the shorter time frames. Starting with the U.S. Dollar Cash Index on a thirty minute time frame:
Near term support should step in at the 86.40 level as the Dollar bounces between 86.44 and 86.65. The daily Dollar shows a breakout up through a triangle pattern that has been consolidating for better than 2 1/2 months.
This breakout took the Dollar convincingly through the 86.00 psychological level. If there will be a test of this (now) support level it will begin with a breakdown on the thirty minute chart and down through the 20 tick congestion (86.65-86.44). There’s no way to know the U.S. Dollar’s move is sustainable until support is tested and established. The Wave low at 86.43 could be one such support and since that is the nearest term support level, that will be a good place to start.
The EUR/USD has found its way up through the 1.2600 level as it bounces between 1.2582 and a high a 1.2615.
While the missile test in North Korea dominating will likely dominate today’s news cycle and the markets in Japan closed, price action could be erratic as the low volume and political uncertainty is sorted out.Â
*All charts are done on eSignal Premium with the EZ2 Trade Software Collection. www.ez2tradesoftware.com
Raghee Horner is an trader with more than 15 years’ experience in the markets. Ms. Horner has taught her brand of technical analysis and charting strategies to students all over the world. She is also the author of the bestselling “Forex Trading for Maximum Profit” and “Thirty Days of Forex Trading”. Emphasizing charting and price action and continues to teach the tools and strategies that encourage self-directed traders to pursue the study of chart analysis and market psychology. She is a much sought after public speaker who has conducted seminars in the US, Canada, the Caribbean, and Asia. For more information on Raghee’s analysis and trading email cs@raghee.com or visit www.raghee.com.