Hey traders,

today after some bullish news for the dollar euro had a huge down day and completed what looks like a 3 week head and shoulders pattern with ultimate target of 1.3226

Head and shoulders is always good pattern to look at to guage targets, but hard to trade based upon.

First key support level for EC dollar futures is at 50ema (red line on daily chart):

With 1.36 fib confluence support right below. With bottom of the channel and and 1.34 fib confluence and backtest of 200dma expected to be other support levels shall dollar continue to show strength.

Interesting short set up is at 1.3951 with 200 hour ema, 50% retracement from last weeks high and previous s/r level ligning up in same area.

Be sure to check Weekly FX Moving Economic Events for currency moving events

Good luck and good trading

Vlad

Two very conflicting stories in regards to the dollar out there the past few days, today 200+ move in the euro seems to favor the Dollar strength story, will have to wait and see how it plays out….

Bloomberg Story: Russia’s Kudrin Signals No Alternative to Dollar

June 15 (Bloomberg) — Russian Finance Minister Alexei Kudrin said the dollar is in “good shape,” further affirming that there’s no substitute for the world’s reserve currency.

Kudrin rushed to reassure investors of Russia’s confidence in the dollar just days after his boss, President Dmitry Medvedev, questioned its global status, joining China’s central bank Governor Zhou Xiaochuan in suggesting the world may need another benchmark for settling international debts.

“It’s too early to speak of an alternative,” Kudrin said in an interview two days ago in Lecce, Italy, after meeting officials from the Group of Eight nations.

Full story here

And then another story by TruthDig: The American Empire Is Bankrupt

There are meetings being held Monday and Tuesday in Yekaterinburg, Russia, (formerly Sverdlovsk) among Chinese President Hu Jintao, Russian President Dmitry Medvedev and other top officials of the six-nation Shanghai Cooperation Organization. The United States, which asked to attend, was denied admittance. Watch what happens there carefully. The gathering is, in the words of economist Michael Hudson, “the most important meeting of the 21st century so far.”

It is the first formal step by our major trading partners to replace the dollar as the world’s reserve currency. If they succeed, the dollar will dramatically plummet in value, the cost of imports, including oil, will skyrocket, interest rates will climb and jobs will hemorrhage at a rate that will make the last few months look like boom times. State and federal services will be reduced or shut down for lack of funds. The United States will begin to resemble the Weimar Republic or Zimbabwe. Obama, endowed by many with the qualities of a savior, will suddenly look pitiful, inept and weak.

Full TruthDig Story Here

Hey Traders,

gold has retraced back to long term uptrend line:

Zooming in on last few months:

Not only is it long term trendline, it is also ambush (50-61% retracement zone from April lows.

After finding some support itnraday at 50ema (red line) gold managed to close below it today and was stopped in it’s tracks by the long term trendline.

Another interesting development is that gold is at oversold level previouslyseen at three organge box areas. Which make it a really interesting play here.  Will be continue taking stabs at long intraday set ups and trying to turn them into a swing trade. Push to 61% line of the move since April is also possible, if it takes place within next 24 hours it would result in some extreme oversold conditions and even more interesting long set up.

Close below 915 would probably mean retest of 200dma, currnetly 897.

On smaller time frame will be watching this channel on the hourly chart:

Today on first bounce gold got rejected by green line 20ema hourly, would need to get above that line to start building bullish case. First interesting short set up would be top of the channel laminated with 200ema hourly, both of which have been acting as resistance recently

As always will keep you posted in inraday, daily and twitter updates as more price action develops

Cheers

Vlad

Hey Traders,

nice to finally get a close that is not 940 for the first time in 6 days. ES put in new closing low, closing 3 ticks above previous intraday low for June

50ema is on pace to cross abve 200dma Friday, those two moving averages are expected to provide support on the downside.

Zooming in further to hourly charts, ES broke down from a slight uptrend channel in place all of June:

ES found support in ambush zone measured from May 28th swing low , break below highlighted bow would make backtest of 200dma and 50ema very likely. With key resistance level at May lows.

On the upside will be watching backtest of the channel, which also happens to be 50% retracement from Friday’s high:

which considering 915.25 low holds will be at 929, with big retracement from the rally high at 934.

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After today there are now 2 weeks worth of positions trapped above, with another push lower possibly causing some heavier selling. Closing below two key moving averages and / or May lows would be very key for the bears also, possibly trapping 2 months worth of positions.

Not sure it is time to host FAZ parties just yet, but bears certainly made some progress today towards building bearish case, lets also keep in mind that max pain for this month is 830, which also favors bearish side. Path of least resistance though will certainly favor the bulls, as only backtest of channel and 934 ambush are in the way of retest of highs.

As always will leave guessing and speculation alone and will keep an eye on shorter term levels highlighted in this update and will keep updating via Intraday / Daily updates as more price action develops

Cheers

Vlad
@esecfutures on Twitter

Hey Traders,

lots of economic events that should move currencies this week, all times GMT, subtract 4 hours to get EST time:

Cheers
Vlad

Update Cash Close:
Well that was a refreshing close after 6 straight ~940.
Will be posting daily updates shortly after the close

have great rest of the day

Vlad

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Update 3:20pm EST:
Got new high tick of 897, first reading above 800, last hour magic and WTF patterns into the close possible. I am staying out.

Update 3pm EST:
Last hour, as always use extra caution especially since it is OPEX week.
Some key technical developments in all 3 followed markets, will have to take a look top down after market close and re-evaluate.

Update 11:25am EST:
New low $TICK reading since may 21st today and high tick of the day only 451, obviously very strong trend day. Would need to see new high $TICK of the day above 800 for possible trend change clue.Some key levels are being broken, might be wise to stay out if not in a position already.
Euro having a huge day down over 240 pips! haven’t seen that in a while.
Gold Tagged 50% retracement line form weekly update, right above weekly trendline.
Welcome to Quad Opex week! Be careful

Update 10:45am EST:
Channel broken, next support on ES ambush at 913s:

Update 9:46am EST:
ES is testing the bottom of the channel, with two weeks of positions trapped above 918.

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Good Morning Traders,

New week is upon us, more particularly OPEX week, before starting to trade always useful to review trading rules: 40 Bits of Trading Wisdom

If you have not yet had a chance, check out all the weekend analysis posts for all main futures discussed in this blog:

• Weekly SP500 / ES Futures Analysis OPEX Edition
• Weekly EURUSD Analysis
• Weekly Gold Analysis - June 14th
• Weekly Dollar Index Analysis - June 14

As always will be updating intraday as more price action develops.

US dollar seems to be getting some support from other governments, no other reserve currency in sight. Stronger dollar will of course hurt fx, commodities and US indices, will keep an eye on key levels form Weekly Dollar Index Analysis

Feel free to follow @esecfutures on Twitter for intranight updates

Have a great trading week

Vlad