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Trade Desk Thoughts:
Headline And Sound-bite Swings: Have you noticed the positive spin that is creeping into the main headlines over the weekend, that was missing during the course of last week? We are now hearing of earlier growth, better economic reports, and a cheerful demeanor for us all to wear, from some quarters.
That is the classic Wave One set-up that is covered in the previous Trade Desk Thought article, Full Article. Take care with that move, it is by design, not default, that we are getting a different delivery this week. But, until the 4 hour channel areas are broken, the detail of which are discussed fully in each pair's trade plan, we have to respect the fact that this is nothing other than market noise.
We are on high alert right now, because something is about to break, there are rumblings that something is coming. Whether that is intuition, experience, a feel, or connections, is irrelevant, the global markets are at a huge swing point, all at the same time. Equities are at main support at the bottom of their daily channels, oil and gold are the same, and the dollar index is at a price point that it has failed to break higher from, and take out the next upwards leg, in previous attempts.
It is all happening as we approach St Swithern's Day (as in Sell in May, and go away, Don't come back 'till St Swithern's Day), the adage that covers Summer trading habits, and is also coming on a week that the U.S. calendar is loaded with economic data that is highly likely to re-value the dollar, one way or another. Add in big players revealing their earnings and we have the potential to reverse the benign pip count that the majors moved last week; Cad 1 pip, Euro 10 pips, Swissy 60, Yen 60, Cable 110, Aussie 150.
In all, the dollar index moved nowhere last week, what was taken in positives from some, was given back as negatives on others. But, the wheel spinning may create traction if the equity, oil, or earnings shoe drops this week. Look to trade to the 4 hour channels, but do not expect to go straight through. We will need to see a break, a re-test, and then a secondary move that allows things to work off a solid foundation. And, if this is not the week that we get a break of the channel, we will reverse, and take things back to the other end of the channel, and play the set-up again.
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