Seamus McKenna
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The US dollar sticks to the script

In a week that has been shortened by the Labor Day holiday Stateside, that represents the start of a new month and that includes a number of significant events in both Europe and the US, the EURUSD pair is, so far at least, sticking to the script. As anticipated here, it has bounced somewhat smartly from the 200 period Simple Moving Average (SMA) (see above) and could now be on its way to completing another traverse of the channel is has carved out between the 1.34 area and 1.28.

Gold, too, in US dollar terms, is behaving as expected. We recently pointed out that it was approaching a significant level of resistance in its retrace of the dominant trend. Has it reversed early from its appointment with the 200 week SMA?

A fairly neat pinbar has been described on the weekly chart. See here for an explanation of Pinbars. It is a characteristic of these indicators that the longer the time frame chart on which they appear, the more reliable they are expected to be.

The events coming later in the week, which have the potential to upset the applecart, are the Institute of Supply Managers (ISM) and Purchasing Managers Index (PMI) in the US on Tuesday, the European Central Bank (ECB) monthly press conference on Thursday, the ADP Payroll report on the same day, which will be watched as a leading indicator for the official Non-Farm Payrolls on Friday, and of course the NFP report itself on the last trading day of the week.

As always, these comments are made in the spirit of identifying the manner in which traders can place probability on their side. They are not, in any way, infallible predictions of what will actually happen in the future. Be careful out there.