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It seemed that all of a sudden there was a rush for the U.S. Dollar this morning. Looking at the charts above of the 240 minute Dollar Index and 240 minute March Euro Currency we can determine a few subtle hints.
In the Euro we see that the downward progression in price created a measurable extension pattern. Using the Fibonacci Extension tool we see that our preferred barometers provided by this tool (.618 and .750 extensions) came to approximately 14647 and just beneath 14600. There may be other ways to judge the pattern and it can be left up to individual interpretation or preference. We found consistency, though, with this particular one as it lined up with other shorter term pattern targets yielding the 14600 level.
Also in the euro we see a double top formed with the 15135 and 15137 highs of Nov. 25 and Dec. 3. From this the rule of thumb potential price objective is approx. 14500.
In the Dollar index there is conversely a possible double bottom formed. It is not as aesthetically nice or apparent as that of the Euro but it provides a near term ball park price objective of 7685 (basis spot month).
And earlier in the week we mentioned an intermediate trading channel breakout in the Dollar Index that projected approx. 7800.
These are some tools that we have outlined here that we find useful. These are also examples of some of the things we work on with trading clients. If you’re interested we’re interested.
Good Trading
Jeff
CB&S
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