EUR/USD Daily Interval Hammer
September 4th, 2008WARNING: This is not a recommendation to buy, sell or hold any financial instrument.
UPDATE: DOLLAR CONTINUING TO RUN HIGHER
I sold my UUP position into this, locking profit. I’ll look at buying it back when the oscillators unwind. I’m NOT reversing it short.
—END UPDATE—
Dollar longs should review this recent post:
A brutal short squeeze on EUR/USD could be unleashed at any moment, assuming 1.43 remains intact… If you’re winning on long dollar, though, consider carefully the extreme state of the oscillators and EUR/USD support through the 1.43 to 1.44 zone. I wouldn’t fight it, but if you do, expect to get squeezed. If your plan is to dump/cover on momentum here, watch your MACD on the two and four hour intervals.
Now, a daily interval bullish hammer formation is in on EUR/USD (at a strong support, see post above). The weekly stochastic has crossed up around eight. Looking at USDX, the weekly stochastic shows a cross down around 92.
I would consider getting clear of the dollar right here. If the bullish move on the dollar is going to continue, it has to consolidate the recent leg. It hasn’t done that yet.
Everyone reading should understand this dynamic by now. If the dollar tanks, the commodities will come rushing back up, dead cat bounce or otherwise. (My guess is that these will be dead cat bounces on the commodities.)
The path of least resistance for the next few days is short dollar, long euro/gold/oil.
Yeah, I’m seeing a double bottom on both XAU/USD and EUR/USD, waiting for the AO to hit it’s twin peak and then go long with a stop-limit under the bottom. However I’m also seeing a negative saucer on the AO for both of these on the 3-hr and 1-dy, however that could have been a sign for what we’re already seeing start to run out of piss. Catching a train when it’s already moving, never easy.