So how do we trade that..?

The $ is having a dizzy spell right now as it heads into day 3 of a quandary. Still, the question remains as to whether it breaks this level northwards or not.

So how do we trade that..?

Morning all.
Another Day – Another Dollar (or so they say).
The $ is having a dizzy spell right now as it heads into day 3 of a quandary.
Still the question remains as to whether it breaks this level northwards or not.
Tuesday (15th) it had an aggressive run through my Fib level only to retrace back to close just underneath it. Yesterday it had another go topping out at the same high but fell back to create a “Doji” of indecision by the end of day (closing bang on the Fib). This morning so far it’s a formed a “Hanging Man” – In short, it doesn’t know what to do here.

The argument between the short and medium term analysts, therefore, remains the same.
Is this where it breaks the trend that started at the beginning of 2016 or is it going to get back in line? Long term analysts are probably waiting for this to turn dismissing the last 2 cycles calling them simply a Phase 2 correction. If they have the same Fib level as I’ve calculated that could bear out that argument claiming it to be a ceiling. It could also explain the $’s reluctance to go any higher with the same gusto previously shown.

Short term analysts are waiting for this to break the Fib as on their smaller time frames where it is now it is bouncing from Phase 2 back into the recent up-trend Phase 1.

So how do we trade that..?
Guys, may I remind you that there are 3 positions a trader undertakes.
Long, Short or Square.

With my pairings based on the $ I have to be square at this time.
The big players will have their guns loaded waiting for the first major signal to confirm the $’s recent revival or demise and it is that I will be waiting for. The $ is overstretched and is due a rebound but that is not to say it is going to have one. Today and tomorrow save anything coming out of nowhere should be relatively quiet and as at 10:00 this morning I have nothing remotely in my sights. My views (for the moment) remain the same however we are, as already said, at a critical level for the $. It could go higher, it could have its retracement and it could spin 180 degrees and fall off the cliff. At critical levels like this I tend to stay out of it. Once it has made up its mind I’ll be all over it as usual but I won’t pre-empt anything as that can be frustrating and very costly.

U.S Oil looks like it might be back on track as it sits on $72.00 a barrel this morning.
In yesterday’s blog I said that it was pretty stretched and could pull back some and it did.
I still think $75.00 is where it is headed and possibly beyond that to maybe even $90 BUT that will be evaluated when and if my first level is right.

Just a reminder to the newcomers to site, there are rarely blogs on Fridays as take a long weekend every weekend with the exception of NFP days. If not back again today catch up next week.


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Tags: oil, US dollar

About Author

Clive Arneil

Clive Arneil worked for major brokers for over 20 years trading most instruments in the Foreign Exchange markets as well as Derivatives. Brokered deals on behalf of some of the worlds largest banks including Barclays, Citibank, UBS, Nat West and the Bank of England. Worked mainly in the UK but also in Switzerland, Germany and the U.S. Retired from the Money Market at the age of 40 and worked as a financial data feed specialist supplying market data to Banks, Brokers and Spread-Betting companies. Still trading and teaching people the skills required to master today’s volatile markets.