Source: Egyptian Independent
- Is the DXY making a recovery?
- Gold (XAU) overview
- Reflections on the week
- Top 3 Pairs for next week
- News Flash: Is BTC setting itself up for more upside?
The world is somewhat restabilizing after an unforeseen pandemic, the dollar has been losing more and more strength but are we starting to see that turn around on the DXY?
With the DXY being hard to read we have been looking at this larger channel which has been covered in the TST Pro Chat.
Being skeptical of both bullish and bearish moves we have seen a huge bullish response today taking it from 90.988 to 92 in 24hrs. We were looking at a potential downside move but the dollar has gained traction today and exploded to the top of the structure causing a move on correlated pairs.
On Friday we would expect to see the dollar sell-off but we are yet to see that. Instead, we have seen a great strength in the USD pairs such as AUD/USD, GBP/USD, etc.
This brings us to the question, will this trend continue and we see more $$$ strength over the coming weeks, or has the dollar ran out of steam?
It must be stressed, tracking your trades and collecting data in times like this is key, being confident and well-equipped traders is what we must be during markets like this so we don't take unwarranted losses.
We all hear about people making crazy gains trading gold, well…. we potentially could see a huge bullish move on gold soon.
Gold has been rallying to the upside since the pandemic due to gold being safe heaven away from fiat currencies. After printing new highs in July of 2020 we have slowly been trickling down a large descending channel.
We have a Fibonacci in play giving us the 61.8% level which in fact lines up with an area of interest for many traders alike.
With the price heading to our AOI very impulsively this could become a case of catching a falling knife, we are aware this trade could become invalid and it just breaks to the downside as more people restore faith in the economic systems worldwide but we can't rule out this potential huge trade on gold.
Personally would like to see a nice slow down into the area of interest and then take it toward the third tap of structure but this trade could be heavily fundamentally driven.
I think it's safe to say we all didn't expect to see USDCHF push higher, personally taking a -1% loss on this pair plus a break even. This pair was not an easy one to catch, with several downside attempts not made with enough conviction and the release of bond news affecting the strength of the EUR we got caught on the wrong side of the fluctuating markets.
With it now showing some conviction to the downside, is it safe to jump in? No, this could just be a fake move to catch people out. Waiting until next week for some further development on the DXY would be the best approach for this pair.
But regardless there are some good takeaways as traders from this pair such as giving the markets time to breath, confirming that your trade is not going against the DXY, and some experience on the tricky to catch CHF pairs.
Here we somewhat see the same story, EURUSD left us with a bad taste after the markets not playing ball following the gained strength on the DXY.
We did see some bullish conviction but overall it was taken with commitment and shortly continued to pop lower.
We see a lot of pairs lining up for a move next week.
A brief overview of USDJPY as we see a similar story here, more upside for the dollar pushed this pair straight through our areas of interests.
Below is what we were looking at in the TST Pro Chat but we saw these levels broken
This pair has seen a reaction from an inverse head and shoulders, well done to anyone who caught that towards the end of last week. We are waiting for the price early next week to trickle back down for a second touch of the ascending channel, once we see that we can look to enter this trade and take it up to the top of the structure or a desired Fibonacci level.
With this trade, we could look to close our BUY positions towards the top of the structure, only if price action is corrective. then we will look to take this pair back down to form the third touch of structure.
This could be a nice move heading into next week so be sure to keep this on your watchlist.
With some pattern separation, this pair becomes clearer. If we see this pair start to plummet to the downside then this would be invalidated but if we see price action push up, create that new high and then push back down for a third touch this could be primed for more upside.
Alternatively, we could be seeing the £££ weakness as of next week but there's no real conviction yet.
This pair needs a little more clarity which next week should offer us but so far this is what we are seeing here lines up with EURUSD.
Profit-taking regions for a short would be around the -27% Fibonacci level, be careful though heading into next week as we need that clarity in the markets to take anything of high value.
Corrective phase? Never making it to $60k? No doubt this will top $100k? there are many opinions on Bitcoin so today we take a brief look at what we could expect to see.
We have had an impulsive push down on BTC after the dollar has gained strength and we started to see some cracks appear in the darker depth of the crypto industry but BTC still has many people putting their money into the digital asset, so what can we expect?
Well, this is only my opinion as BTC can be heavily driven by fundamentals or even a huge liquidity dump which can drop the markets unforeseen but I feel we will see another push back up to original highs.
Seeing the market reach $58k again would be a huge achievement for the life of Bitcoin but it will seriously take a lot of money to push it through those levels, not to say it can just rocket. Whereas I feel we will see a heavy rejection after meeting the old highs and push back to some lower levels of strong liquidity to gather more orders and to rocket to the upside again.
Now this will affect the whole crypto markets but this may be a way for the big investors to have another chance to buy up all the remaining digital assets and put more money into their pockets.
But as with anything crypto, this could be merely the beginning for BTC and the highs it made.
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We thank you for reading this week's addition to the TST Newsletter, have a great trading week, and stay consistent. – 'The Social Traders Team'