How To Navigate FX Chop-Fest March 2018

Imagine not getting too amped up over the back and forth price action in FX over the last few weeks and making silly impulsive trades?

It’s so easy to get ‘sucked in’ to whatever the flavor of the day is thinking that that is the next NEW TRADE.

Let’s just dial it back a notch. The charts and analysis below will allow you to:

  • See the FX market in an objective manner
  • Tune out the noise
  • Identify clear price levels where trades can be entered and exited.

Ready to get started?

Chop-Fest

Good morning traders. I hope all of you have had an ample serving of patience and perseverance this morning because price action is challenging in here.

While there do appear to be some very solid patterns emerging, they are not taking shape fully….yet.

There is no better place to start than with the Dollar Index (DXC).

  • The trend overall remains DOWN
  • Near-term price action is MESSY
  • Still expecting a resumption of the down-trend

Guess what? It is OK for us to not know exactly where prices will unfold in the very near-term. Remember, just because the markets are open, does not mean there will be a set-up on that day.

Naturally EUR/USD is following a similar erratic path. And while near-term price action may be challenging, we do have VERY CLEAR levels that tell us if taking a bullish stance overall is wrong. That level would be 1.2154, the March 1st low.

But for now, I want to try and get a handle on current price action.

  • Larger degree Wave 2 could still be unfolding – below 1.2258 would confirm this
  • Only a move below 1.2154 removes the bull case
  • Need to be on the lookout for attractive long entries in and around current levels

If we look at pairs like AUD/USD and USD/JPY they will certainly be impacted by the moves in the Dollar Index (DXC), but I think a better way to gauge future movements is by looking at the equity markets. Get that forecast right and you can get some great visibility on where these pairs are heading too. Here is my take on the S&P’s…..continue reading

Dave

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