-GBPUSD range trade
-USDJPY trend index remains elevated
-USDCAD eyes 1.30, big move expected
[B]About the DFX Trend Index[/B]
The DFX Trend Index ranges from -100 to +100 and is updated everyday at 5 pm eastern US time. On the charts, bars are painted blue if the index is above 75 (strong uptrend) and red if the index is below -75 (strong downtrend). Readings between -25 and +25 result in a green bar to indicate that price has reversed to the mean. The spreadsheet shows the index values for the last 15 days (there may be a slight difference between the index values produced by the charting package and the spreadsheet).
75 to 100: strong uptrend / potential for a top
25 to 75: in a range / early uptrend
-25 to 25: price has reversed to the mean
-75 to -50: in a range / early downtrend
-100 to -75: strong downtrend / potential for a bottom
[B]EURO / US DOLLAR[/B]
The trend index is at -38, which indicates range / early downtrend. Considering that the EURUSD has declined from 1.60 since July and from 1.47 since December, it is unlikely that the EURUSD has just entered a downtrend.
Strategy: none
[B]
BRITISH POUND / US DOLLAR[/B]
The trend index is at -41, which indicates range / early downtrend. Range traders can trade both sides although there is more confidence in the downside. Support is at 1.39 and resistance begins at 1.4250
Strategy: limit sell at 1.4250, against 1.46, target 1.35
[B]
AUSTRALIAN DOLLAR / US DOLLAR[/B]
The trend index is at -3, which indicates mean reversion. Thre is no directional bias at this time.
Strategy: none
[B]
NEW ZEALAND DOLLAR / US DOLLAR[/B]
The trend index is at -28, which indicates range / early downtrend. Structure is bearish as long as price is below .52. Pivot resistance begins at .4979.
Strategy: limit sell at .4979, against .52, target TBD
[B]
US DOLLAR / JAPANESE YEN[/B]
The trend index is at 99, which indicates strong uptrend / potential for a top. Conditions have been strong uptrend for 9 days now, so beware of a reversal. 100-101 is a resistance zone.
Strategy: none
[B]
US DOLLAR / CANADIAN DOLLAR[/B]
The trend index is at 75, which indicates strong uptrend. The pair could be preparing for a breakout above 1.30 from a triangle.
Strategy: long, against 1.2350, target 1.40 - add to long position at 1.2830 is given the
[B]
US DOLLAR / SWISS FRANC[/B]
The trend index is at 23, which indicates range / early uptrend. Following strong uptrend readings in early February, the USDCHF reversed and some recent readings have indicated mean reversion. Notice that there were not strong uptrend readings at the top of the recent range. This indicates a weak market and additional weakness is expected.
Strategy: short, against 1.19, target 1.0950
Jamie Saettele publishes Daily Technicals every weekday morning (930 am EST), COT analysis (published Monday mornings), technical analysis of currency crosses throughout the week (EUR on Tuesday, JPY on Wednesday, GBP on Thursday, AUD on Friday), and the DFX Trend Index every day after the NY close. He is also the author of Sentiment in the Forex Market.
Please send comments about this report to [email protected]