The USD appreciated last week, as expected in my other posts. We had a week loaded with high profile event risk. I believe ECB intentionally announced its dovish policy and just a day before that FED had one its most hawkish monetary policy announcements.

Also the influence of the FED monitory policy caused precious metals depreciating during the Friday session. I posted the following call for Gold             and hour after ECB when it was round $1308.

Click and Play

In this post I review:

1) US Dollar            
2) Euro            

But before I start reviewing these two currencies, see the EURUSD             6 month candle. The last candle is still open but will be closing in two weeks. It is very bearish as it pulling back from EMAs and it may even close as a bearish engulfing candle.

Regarding USD, first chart is 6 months USD equally weighted average chart (to replicate see the screenshot title). It is Bullish engulfing unlike EURUSD             which was shown above.

On daily also we have a flag formation and the upper band of the flag was broken on Friday session, when we had a pullback in DXY             .

DXY             daily also is about to break the Inverted H&S . On Friday it reached to 95.13 and could not break the Neckline.

also this is DXY             6 months chart

Emerging markets have opposite correlation with USD and it broke the Neckline of the H&S on Friday.

Shanghai compost is the same as Emerging markets and opposite correlation with USD expected. It broke the Neckline too.

As USD has been becoming a stronger currency we observe more capital coming into Treasury bonds as a safe heaven and not in “Gold”.
Here is junk bonds see the follow of the capital in this market.

and that caused treasury Yields to retreat in contrast to the price on the Friday session.

Nikkei has a positive correlation with USD and it is heading higher and although the Friday’s candle is not green but closed 0.5% upper than the gap.

NOW LET’S LOOK AT EURO            

This is the monthly EURO             weighted average

Basic textbook rule for wedge formation is rotation from upper band of the wedge to the lower band of the wedge .

And this is weekly

This is weekly EXY             , pulling back from the midline of the channel

And see the pullback from resistance for Euro futures            

Looking at the European indices they all rallied as we expect opposite correlation between the currencies and indices. This is EUSTX50            

Daily CAC

Daily DAX            

See the pullback on weekly German Yields

and France Yields which I think it made a false breakout of the wedge and we may see something like Gold             for this market.

An Italy             Yield

Overall I am very bearish on EURUSD             Trade and here is the trade I posted recently for EURUSD             .

Click and Play

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Many thanks for your support,

KHAN