DXY: Long term analysis
Diupdate
In this chart we can see the two main uptrends in the dollar, one from a 6-month timeframe setup, and the one in the 2-month timeframe which recently got confirmed surrounding the US Presidential election. The long term one, has time to evolve until well into 2020, and the one in the intermediate term could last until May-June 2018.
Target for the first uptrend signal was hit, but it could extend to twice the range without much problem, and the 2m signal offers two targets, one that was almost hit and lies right above a strong low volume resistance zone, and two potential top targets that sit against 2m and 6m resistance, and close to twice the long term chart's target range.
If we don't fail the recent intermediate term advance, and hit the target, and don't rebound instantly, or even worse, fail here and simply drop lower without hitting it in time, we can expect the dollar to rally for a good while, potentially hitting the most optimistic targets, in the long term. What I'd like to see, is that, since I'm long, and would be one in a life time risk/reward trade for me. If this fails, which is what fundamentals could suggest, according to my mentor, Tim West, then I'd have to change my mind and be flexible to trade against the trend. A failure in the 2m signal would be catastrophic, and would involve some kind of massive correction in equities probably, as the 'Trump trade' unwinds, and carry trades unwind. I'd rather not see that for now.
As a precaution, I'm switching to a long only stance in metals, the Euro and bonds, whenever possible, taking short term swing trades to catch the recovery after any washed out, oversold declines. This strategy could coexist with maintainig a long only bias in my preferred USD pairs:
USDSEK, 
USDGBP, 
USDNOK, 
USDMXN and my long equities portfolio. I did introduce some shorts too, so I'm open to trade both sides, based on valuation and different opportunities that might arise from changing fundamentals and news stories in the short and intermediate term.
Cheers,
Ivan Labrie.
Target for the first uptrend signal was hit, but it could extend to twice the range without much problem, and the 2m signal offers two targets, one that was almost hit and lies right above a strong low volume resistance zone, and two potential top targets that sit against 2m and 6m resistance, and close to twice the long term chart's target range.
If we don't fail the recent intermediate term advance, and hit the target, and don't rebound instantly, or even worse, fail here and simply drop lower without hitting it in time, we can expect the dollar to rally for a good while, potentially hitting the most optimistic targets, in the long term. What I'd like to see, is that, since I'm long, and would be one in a life time risk/reward trade for me. If this fails, which is what fundamentals could suggest, according to my mentor, Tim West, then I'd have to change my mind and be flexible to trade against the trend. A failure in the 2m signal would be catastrophic, and would involve some kind of massive correction in equities probably, as the 'Trump trade' unwinds, and carry trades unwind. I'd rather not see that for now.
As a precaution, I'm switching to a long only stance in metals, the Euro and bonds, whenever possible, taking short term swing trades to catch the recovery after any washed out, oversold declines. This strategy could coexist with maintainig a long only bias in my preferred USD pairs:
USDSEK, USDGBP, USDNOK, USDMXN and my long equities portfolio. I did introduce some shorts too, so I'm open to trade both sides, based on valuation and different opportunities that might arise from changing fundamentals and news stories in the short and intermediate term.Cheers,
Ivan Labrie.
Catatan
Going well so far, curious to see if we hit the next target, and then seeing if we get a long term top in the dollar, and a recession in the US...
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