(Over?)Confident Dollar – Inter Market Analysis

Dollar Index

Daily

4 hour

With a bullish wedge on the 4 hour chart, the dollar index is poised for a lift off higher. Taking the distance of the flag pole, the measurement will allow the index to breach above resistance. Daily RSI maintain its bullish bias and fundamental is supportive given that ECB will do more stimulus and the imminent fed rate hike in December.

German Bund

Daily

4 hour

Daily chart post a possible Head and Shoulder pattern but we have learnt the lesson that it may never happen. Price action is still within the rising channel so bullish bias remains. The short time frame do suggest a pullback is imminent and we have reached 76.8% resistance – certainly an area for small long but we maintain caution and may wait for a confirmed blow off candle with a long wick to enter.

Euro

Daily

4 hour

Tell tale sign of a small bounce or reversal is under way – twitter stream showed all sort of potential reversal zone in the Euro while the reality remain the same that one could see a small bounce as dollar bulls take some profit ahead of FOMC minutes. It would not surprise us to see a spike reversal before Euro consolidate at the lower range again.

Dax

Daily

4 hour

The strong recovery is met with some profit taking while dips remain a buying opportunity. Post Paris attack, buyers have flocked in while yesterday bomb threat in Germany has certainly caused risk off sentiment to creep in. However, the early trading session shown a rather neutral take as investors remain buoyant. Perhaps the ECB QE expansion is what keeping the DAX at its current strength.

Gold

Daily

4 hour

New 2015 low in gold and brand new 5 year low – relentless selling ahead of FOMC meeting minutes but the short time frame setup for a small bounce. The low at 1063.90 should get retested during NY open – there is a decent opportunity for gold to bounce to the upper range of the channel while rallies are another selling opportunity. However, the risk reward could well be shifting – that is of course depending on the daily chart putting some reversal sign (which has yet to materialise).

Silver

Daily

4 hour

Silver daily is giving buyers some hope of a double bottom but it has to close as it is today. The 4 hour chart is already showing positive divergence and the risk reward is certainly turning in favour of a small bounce. If this bounce, look for the daily 20 ma as target.

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