Quiet Start to the Week
Maybe it’s Tryptophan, Turkey, and Thanksgiving but the markets are already acting like they’ve feasted on the big meal…
Then again it could be the range-bound dollar, lack of economic data today, and a weak Dow that’s got traders sitting on the sidelines.
The U.S. Dollar continues to find resistance at the 76.00 psychological level and prices are retreating quickly from any pierces through this key level. The dollar has made a short term bottom but this market is far from a significant reversal or even uptrend for that matter and that’s what trader must keep in mind if expecting the bounce to follow through.
The dollar’s intraday chart are beginning to transition to sideways cycles as the holiday week will certainly be a week of less participation and lower volume.
The Dow Jones continues to trade lower this morning as the 13,000 support level looks close to being tested.
The USD/JPY is strengthening with the Dow down almost -170 points.
The USD/JPY is testing the 110.00 level – and this must be particularly disheartening to the carry trades as the 109.00 level was where the bounce began. The current trend of the Dow suggests that there is likely to be strength only if buyers support 13,000 for a bounce and continuation up through the 13,250 level.
This weak Dow will continued to be watched closely by the carry trades as the current action is looking a lot like the USD/JPYsell off from early Summer.
The Dow is trading within a falling wedge pattern, keep an eye on the downtrend line resistance as this is what will be the first step to a bounce and reversal.
All charts used with permission from Autochartist.