On Monday, the 16th, I sold most of my dollar longs. The reasoning was that the Friday momentum was lost on Monday, combined with the selling climax the week before and a personal scenario that the removal of patience would be a case of buy the rumor sell the fact, which proved right. On the 18th, I have sold all my dollar longs, and shorted the dollar. What happened on the 18th, looks to me like a clear reversal and this bull run is over. Note that the dollar trend is not over, we will see this pair at parity in a few months, but for now, all the shorts need to be squeezed out of the market. In a couple of months, I will be ready to put my money back on the dollar.
On the left side, we have the weekly chart which shows climactic action. Note that march is a turnover month, and that adds volume to the huge volume bar. However, looking at the daily chart with volume, the high volume was not on the roll-over day, so the week counts as a selling climax. The Force Index is incredibly oversold, and it is getting back inside the channel.
Going on to the daily, I outlined the levels where I sold this pair, mainly because I posted lots of comments about how the dollar was bullish when everybody looked for corrections, and the replies I got were full of hate, unfortunately. Fortunately, I was right. The momentum from Friday was lost on Monday. That is a serious pattern in my book, however, without the extreme bullishness surrounding the dollar I wouldn't have taken a position. On the 18th, the FED dropped patience, as Hilsenrath told us a week before, and this was a clear buy the rumor sell the fact trade. I went long EURUSD after the press conference.
Yesterday's rally in the dollar looks to me like amateur buying, I doubt that real money bought again. This of course, is a personal opinion, and should be taken with a pinch of salt.
I expect the dollar to correct in the coming weeks. I have no idea about the size of this correction, but personally I would like to buy it again at 1.15 on EURUSD. I will keep a small short on the dollar, but I doubt it will be a real money maker. I have been extremely bullish on the dollar since the summer, and I have tens of charts to prove it. I am now neutral to bearish. This has been the best trade.
On the left side, we have the weekly chart which shows climactic action. Note that march is a turnover month, and that adds volume to the huge volume bar. However, looking at the daily chart with volume, the high volume was not on the roll-over day, so the week counts as a selling climax. The Force Index is incredibly oversold, and it is getting back inside the channel.
Going on to the daily, I outlined the levels where I sold this pair, mainly because I posted lots of comments about how the dollar was bullish when everybody looked for corrections, and the replies I got were full of hate, unfortunately. Fortunately, I was right. The momentum from Friday was lost on Monday. That is a serious pattern in my book, however, without the extreme bullishness surrounding the dollar I wouldn't have taken a position. On the 18th, the FED dropped patience, as Hilsenrath told us a week before, and this was a clear buy the rumor sell the fact trade. I went long EURUSD after the press conference.
Yesterday's rally in the dollar looks to me like amateur buying, I doubt that real money bought again. This of course, is a personal opinion, and should be taken with a pinch of salt.
I expect the dollar to correct in the coming weeks. I have no idea about the size of this correction, but personally I would like to buy it again at 1.15 on EURUSD. I will keep a small short on the dollar, but I doubt it will be a real money maker. I have been extremely bullish on the dollar since the summer, and I have tens of charts to prove it. I am now neutral to bearish. This has been the best trade.
