Last week: Both FX indices remain log jammed at respective S/R levels and this is making for choppy price action across many FX pairs. However, the nimble nature of the TC Trading system can take advantage of these choppy moves and there were some decent trades that triggered last week. I’m hoping that this week’s Jackson Hole Symposium might get the FX indices to break free from their recent congestion zones to enable FX pairs to return with some trends. I’ll be ready with my trend lines if so!
It was over three years ago, in July 2014, when I charted the S&P500 and DJIA indices predicting bullish targets for their respective ascending triangle breakouts. Back then I noted a target for the S&P500 of around 2,500 and for the DJIA of around 21,000 although I was uncertain of the time frame for these moves. Those targets have now been reached though! Both indices have enjoyed a bullish run since the end of the Global Financial Crisis and I’m now looking out for any pause for them, or healthy pullback, given that trends don’t travel in straight lines forever.
Both FX Indices have printed reversal-style weekly candles as they remain log-jammed at their respective S/R levels. I don’t try to predict which way things will move but, rather, watch for trend line breaks to offer clues about any new breakout move and this is what I’ll be doing with both of these indices next week.
The US$ remains very choppy and is now trading in a daily-chart Flag above 92.50 support and this range-bound activity is keeping many FX pairs choppy as well. In fact, both FX indices seem to be jammed up at S/R levels making for very tricky FX trading of late. There is CAD CPI and USD Prelim UoM Consumer Sentiment & Inflation Expectation data to monitor today.
The US$ is back to struggling against resistance from the weekly 200 EMA and I suspect this was brought on by the weak US Building and Housing data and possibly by some uncertainty expressed through the FOMC Minutes. Both FX Indices are pegged at significant resistance levels and I believe the next major market move will be led by whichever of these is the first to make a decisive breakout. The TC trading system continues to catch pips off these erratic moves though due to the focus on the lower time frame charts. It makes for more screen time BUT this then means lower Stops and better Risk/Reward. As the saying goes, ‘There is no such thing as a free lunch’!