Straight forward analysis on daily chart appears to offer a clearly low-risk-high-reward proposition to short the DXY. Further analysis offers a different observation altogether. 4 charts that might confound you or paint you a DXY direction that will jump out convincingly.
This post follows up two previous observations. A high probability reversal setup spotted in AUDJPY on 25 January 2018 and a similar setup spotted in NZDUSD last week 15 March 2018. AUDJPY is confirmed and moving along nicely while NZDUSD is perched at the edge of confirmation.
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USD could be due for a short term recovery since DXY has been supported for two months or more. An inspection of major USD pairs since DXY bottomed on 16 February 2018 reveals USDCAD and USDCHF to be early movers. USD long positions in these pairs could outperform others if DXY retraces higher from here.
2 out of 5 high probability reversal setups appear in NZDUSD chart. This chart suggests a potential short should price get resisted one more time. Two more features to look out for are the right candlestick pattern and a confirmation break.
A look at year to date relative performance of major forex pairs and stock indices Despite high positive correlation, subsequent action following early February’s correction, separate themes are showing up as winners and losers emerge.