Traders were greeted with a slate of key economic reports last week, interest rate decisions from the US, Euro Zone, United Kingdom, Australia & unemployment from the US (those were only the highlights). All of these events caused volatility traders either love or hate.
By weeks end, the price action became interesting. Members of the StockTwits community see bulls head for the US dollar. I am staying neutral & let the market action tell me where it is going. There are several areas I will be watching that will persuade me to go one way over another.
- Lower trendline from September 10 lows through early last week.
- If trendline breaks, 38.2 fib level (1.3633) from September lows to last weeks high
On the shorter term:
- Below trendline break is 50 fib level at 1.3989 then 61.8 fib level at 1.3921 (October 19 low 1.3694 – November 4 high 1.4281).
This pair has had a good run the past week, so my thinking is it is a retracement. We will have to see what the market provides us.
- 38.2 fib level 1.6169 (November low 1.5960 – Nov high 1.6298) where it is clear it is current strong short-term support/resistance.
- Increasing US equities
- Increasing price in gold
- 4.75 interest rate, increased from 4.50 last week
The chart above is a weekly chart because it is the only chart I can pinpoint a long-term target with Fibonacci extensions… 127.2 level at 1.8695 (2008 high – 2008 low).
Supports are at 0.9850 & the obvious 1.000 parity levels. Beyond that, it is upside from there.
On the short term, the pair has been in a consolidation state since Thursday afternoon, something expected after a big run up the past week.