Does anyone really know what’s going to happen next?

kevinmhughes

I hope everyone is doing well, especially in these markets.  We haven’t seen volatility like we’ve been seeing over the last several weeks in a very long time!  I personally love it.  While congress is still trying to blame somebody for the flash crash, we have all moved on and realized that wasn’t a ‘fat’ finger mistake…  It was supposed to happen.  Now that there’s been some time and crazy activity, the FX levels have re-emerged on all time frames.  Thankfully, we are all on the StockTwits community so regardless of your trading experience, the ideas, charts and comments coming from the community has certainly helped everyone either navigate the markets through precise levels or for the beginners you were able to witness some of the greatest traders not bat an eye at what was happening.
Here are my daily charts for the $EURUSD, $USDJPY & $AUDUSD their levels as well as some technicals.

$EURUSD

There was a very nice $USDX rally mid Friday afternoon that was shortly lived.  I do believe it was shortly lived because it was more along lines of $USDX longs being closed out.  With the current set up on the $EURUSD daily chart, I believe there will be more $USDX strength in the beginning of the week.  We will more than likely see the $EURUSD touch the 1.2172 level before bouncing up to the 1.2393 level.  I also believe Sunday & Monday for the $EURUSD will be in somewhat of a small range.  Still a negative sentiment for those days until Tuesday once it bounces off the 1.2172 level.

I won’t become ‘long-term’ bullish on the $EURUSD until it closes DECISIVELY above the 1.2600 level.  I don’t see any longer term bullishness on the $EURUSD until it reaches at least the 1.1500 level (there will probably be some significant consolidation around the 1.2000 level.

The $AUDUSD is also showing some bearish signals.  The evening star, doji or whatever you want to call it that formed on Friday’s close is why I believe there will be some more downside pressure, at least in the beginning of the week.  I do see a test of the .8350 then a bounce up.  If the $AUDUSD gets above and holds the .8600 level, then its back to the .8800 level along with higher $CL_F prices.

As I am ALWAYS preaching, if you are watching the $AUDUSD you can also watch the $NZDUSD pair and the $CL_F contract, they mimic each other.  One of theses derivatives can be used as a tell tale for the other (the currencies are usually the first thing to move).

The $USDJPY is also showing bearish signals (same technical as the $AUDUSD).  The $USDJPY also closed at a pivotal level (91.00).  We are probably looking at a 100 pips range with the $JPY crosses.  If the $JPY strength is strong enough, we should blow right through the 90.00 level and reach the 89.25 level.

All-in-all, I see some significant $USDX strength in the beginning of the weak.  With $USDX strength, first has to come $JPY strength and $EUR weakness.  With all of those things happening, we will see lower equity markets around the world as well as lower $CL_F prices (at least in the futures contracts, maybe not at the pumps).

ALSO, if you’re in the Chicago area next week, make sure you sign up and attend the StockTwits Stock Camp.  There are going to be some of the greatest traders not only in the StockTwits community, but the trading world.

Good luck trading this week!


The information in this blog post represents my own opinions and does not contain a recommendation for any particular security or investment. I or my affiliates may hold positions or other interests in securities mentioned in the Blog, please see my Disclaimer page for my full disclaimer.

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