Article originally published on innerfx.com and republished here with permission
It’s human nature to find patterns where there are none and to find skill where luck is a more likely – William Bernstein
Good morning. Euro opened lower this week, erasing most of Thursday’s gains, therefore dollar index found support at 80:
4hrs chart still looks bullish as current decline could be corrective. Next support backs the highlighted range at 1.2800, which is also the median retrace value of the entire up leg from 1.2625 to 1.2980
According to COT data, bearish positions are printing fresh records each week:
It was rather clear that a breakout was underway and its target at 32.50 was reached earlier than I’ve been expecting. What’s next? well, corrections are normal after such vertical moves, so keep an eye on next support range around 31.50, if a correction is due. I remain bullish on silver, expecting more upside action.
It seems that EURAUD takes EURCHF’s place in the “one way only” category and every single correction, no matter how weak or strong, is just another opportunity to sell the cross. I was wrong to expect an extended correction these days and I guess we can’t talk about a decent correction as long as it holds below 1.2500 – and that’s not even an important resistance – but where else to expect a notable resistance in such a strong downtrend?
AUD follows stocks higher and it seems there’s more upside for AUDJPY in the coming days. Basically, it’s all good (if you’re bullish) while it holds above 80.
Cable is still in a bearish formation but it’s a good idea to keep an eye on two resistance levels (highlighted below). Potential buy setup would be likely on the breach of 1.5550-1.5600