Sell 137.110 stop. Protective stop 139.080. Potential projection 134.000.
Reasons for the Trade:
- The monthly chart has a previous sell signal that is still intact.
- On the monthly chart, the fx has been in a downtrend since the 2008 high. It appears to be in the process of a third wave down.
- The weekly chart has a previous sell signal that is still intact.
- On the weekly chart the fx rallied back over the 100 and 150 day ma but is now selling off. A sell signal would push it back under the 150 day ma.
- On the daily chart the fx rallied up to previous resistance and is now selling off.
- On the daily chart the fx formed a key reversal top today - suggesting a trend change from up to down.
- On the daily chart the fx has had a fibonnaci .480% retracement. In 2008 it had a .382% retracement (approximately) before starting another major wave down.
- On the daily chart the dollar is rallying off the low end of the bollinger band - just as it did in 2008.
December dollar index.
Buy 77.590 stop. Protective stop 76.680. Potential projection 79.000.
Reasons for the Trade:
- On the monthly chart the dollar rallied back over the uptrend line formed since the early 2008 low last month.
- On the weekly chart the dollar sold off to the support going back to late 2008 and is starting to rally.
- The weekly chart has a previous buy signal that is still intact.
- On the weekly chart the dollar rallied over the major downtrend formed since the mid 2010 high in late August with follow through. That suggests a trend change from down to up.
- On the daily chart the dollar sold off to the mid September support and is holding.
- On the daily chart the dollar had the equivalent fibonnaci retracement of approximately .618 as it did in 2008 before a reversal and continued follow through rally.
