Dow Close at Critical Support Major Opportunity for Dollar, EURUSD
Congestion this past month for so many of the market's favorite trading assets (equities, commodities, major currency pairs) hides a critical fundamental fact: that investor sentiment is in control. It just so happens that there isn't a decisive view from the masses as to whether it is time to load up on higher yielding assets or deleverage out of expensive positions. With the Dow Jones Industrial Average closing this past week just above critical support at 13,300 and the S&P 500 above 1425, we head into next week with considerable opportunity.
With the entire market on risk line, a serious break lower for US equities could easily translate into a EURUSD move below 1.2800, NZDUSD breaking 0.8150 and GBPUSD sliding below 1.6000 amongst others. In our weekend video, we discuss why the potential is so high, what a serious shift in risk would look like and various trade setups that can take advantage of.
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DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.