Monday opens with + risk appetite by Mary McNamara

There has been some obvious USD weakness throughout today’s Asian session and this has triggered a bit of ‘risk appetite’.

I’ve been noting over recent weeks how the US session has provided better and more profitable low risk trading opportunities. It might be worth waiting to see if this current momentum continues then before getting too excited.

Indices: The USDX seems to be pulling back from the resistance zone of the monthly triangle trend line:

USDX4

EURX: drifting higher within the trading channel:

EURX4

TC Signals: some TC signals have been triggered BUT these aren’t valid. However, if the momentum picks up in the US session they might provide good support to directional trades from then on.

E/U: a new TC signal off my 4pm candle but the E/U is below the 4hr and daily Cloud:

EU4

A/U: this TC signal came through earlier this morning but hasn’t moved far. Whilst above the 4hr Cloud it is below the daily Cloud and thus isn’t the best of signals. Watch for any pick up though in later sessions:

AU4

Cable: This TC signal came off my 4pm candle too. Like the Aussie, this pair is above the 4hr Cloud but below the daily Cloud so caution is needed. Note that the GBP/USD is still trading below a bear trend line, the daily chart’s wedge trend line, that has been in force since mid July and, thus, a close and hold above this would be best seen before being confident with any long trade.

I tweeted this morning also about a possible bullish ‘inverse H&S’ I’m seeing here. The ‘neck line’ looks to be around the weekly 200 EMA. This region is quite congested with the daily wedge and monthly triangle trend lines nearby. Thus, any break and hold above the weekly 200 EMA would be quite a bullish feat and suggest continuation:

GU4I had mentioned weeks ago how I think something big seems to be brewing and I’m wondering, if USD weakness kicks in, then we might get a classic style ‘risk on’ rally. As they say….expect the unexpected!

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