EUR/USD Near Term Bottom
September 14th, 2008WARNING: This is not a recommendation to buy, sell or hold any financial instrument.
As you know, fooling around with Forex systems is one of my hobbies. I happened to be fiddling with something when I noticed that, last week, EUR/USD put in a near term bottom on the morning of 9/11. On the 10:06 candle, it briefly makes a new low and then it has generally been rising since.
It’s probably a coincidence. No really, I mean it. A coincidence. Not a Coincidence. I suppose it could become a Coincidence if that candle was the beginning of a major rally in EUR/USD.
Anyway, that is all.
What are you calling for gold and euro this week? Not a recommendation, just your perspective. Based on the Lehman drama, it could go either way. Maybe people will like the response and buy in, maybe they’ll freak and run to gold. Of course, going long on gold through leveraged securities isn’t really a hedge when your bank fails in the ensueing chaos and you have no account to wire out to.
The uptrend on the U.S. Dollar Index is strong and looks set to continue after a short period of weakness (days) which is already under way. In other words, bullish moves on gold and oil are likely dead cat bounces that could be viewed as shorting opportunities. (I’d believe daily interval stochastic crosses down over 20 for swingers. Shorter term traders will use shorter interval charts. Intraday, traders will be looking at short dollar plays and long cranks on gold and oil. I wouldn’t chase gold long here, unless scalping very short term.)
Of course, there is a slim possibility that the dollar has topped at resistance and that gold and oil have bottomed. These assumptions are very counter trend and trades based on them should be managed on an intraday basis.
Excellent analysis.
For the win, I’ve heard 1.35 called as the bottom for EUR/USD and $100 being an important support on oil and $710 being the next support on gold. Does your analysis project similar limits?