Reviewing The Major Pairs, and Their 4 Hour Global Market Drivers
4 Hour Chart Forex Trend and Momentum Updates:
We still have long-dollar trends, and also have overbought Usd based reads on the major pairs. That leads to one of two things happening. Either, we are seeing a swing change that starts to set up a period of Usd buying ahead of the FOMC rate decision and statement on Wednesday. Or, the major pairs have pulled back to support in anticipation of making the next leg higher against the Usd. Either way, a straddle will catch the variables that fall in between.
The answer is to look to regional economics to light the technical fire, and to be prepared to cast opinion to the side, and trade the order flows that hit in three, eight hour waves as each economic region opens for commercial business.
4 Hour Chart Usd Trend and Momentum Updates:
Red flag; Global equity markets are overbought, while commodity markets are oversold, and that will lead to a clash of the Titans in regard to where global markets trade the dollar. Oil has been extremely volatile in its intra-day, and day-to-day ability to move values, something that equity trade has eliminated in the recent run. That signals an oil market that is loaded with speculative interest, at a price point that may just be a little above perceived fair value.
For equities to hold higher as earnings season trade comes to a halt, there will need to be strong support coming into crude oil trade. Right now, these two markets need each other to be able to hold valuations. Either one starting to show signs of fatigue will easily draw in moves that bank recent profit. Equities and oil are on the opposite side of Usd moves; Equity and Oil down = Usd up, and vice versa.
Long trends seem to be having their first real test for three or four weeks, and the resulting moves may set the tone for August trade. In bull markets, August is the third best returning month of the equity year, however when August dips, it does so in a big way. Let the games begin.