Forex Trading Insights: How to Trade the Surging Dollar 10-13-23

Outline

Introduction

  • Overview of dollar’s strength after economic reports
  • Preview of consumer sentiment report on Friday morning

Key Points

  • Dollar surged upward after digesting economic data
  • Broke through moving averages and previous resistance
  • Found support at weekly open before pushing to new highs
  • Euro and pound pairs broke down with dollar strength
  • Euro lost support at 1.06 and found minor support below
  • Pound crashed through weekly open and previous support
  • Yen built base above 149.75 and looking to close gap

Conclusion

  • Watch for consumer sentiment reaction on dollar pairs
  • Potential for more dollar upside or reversal on new data
  • Recap of key levels that were broken or held as support

Transcript

So today was an action packed day for the dollar. The dollar saw a lot of upwards pressure off of today’s reporting.We do have more reports coming out in the morning for the dollar.

So for the dollar we do have that consumer sentiment report that is coming out at 10:00 a.m. And so with that we will see the market respond to that as well. But as we have it, the dollar really shot up like a cannon.

So the dollar only had as far as the bottom level of support that it found as far as with that midpoint and its 200 moving average. But as that news was digested, it did take a while for that news to be digested. After that news was digested, price did begin to move up and after moving up, it didn’t just move up a little bit, but it shot entirely through all of its moving averages that were above it.

So that’s its 20, it’s 50 and it’s 100 shooting all the way through those and above this week’s open and after building a base so it did spend some time here. After building a base here at this week’s open, it did shoot up even past that making it all the way back up here to 100 and 650 and again getting this first four hour candle close. Getting its second four hour candle close.

And now in its new session, it is right now fighting and battling with this 100 and 650 area. We also saw some bullishness here as we saw the UC idea break out of this trend that it was in. It had been trending sideways immediately since the top of the week.

The entire week it has been trending sideways, not doing much at all. Today it shot up through all of that noise finding support with this 100 period moving average which then carried it back up to its shorter term moving averages and from there it made its way back up to 137. After touching 137, it then proceeded down as far as to retrace a bit before seeking to continue this journey to eventually go back up, seeking to go back up depending on what the news comes out tomorrow as looking to go back up to 137 and build there.

We saw the opposite for our Gu and EU pairs. And so for this one, we did see this one break down through the major quarter area, lose its weekly open, not only lose this weekly open, but then also losing 122 as well and findings support that you guessed it, the minor quarter level of 121, 750. And so with that it did end up finding support here and with finding support here, it is now building a base there until more news comes out tomorrow for the dollar and we see a very similar situation with the EU idea.

So again lost that 106 area. That was a very important area for it to kind of break through because it was acting as resistance before. So it finally did break through, built the base above.

It continued to stay up for the entire week. Once the news came out, it then began to flush. Even if you want to take a safer trade, you could just take the breakdown of 106.

106 broke down, came back up to retest the weekly open. No buyers were there, so price was rejected, and it found its way down to the next minor quarter area below this fall. So the next minor quarter area below the fall, which was100 and 525.

And so with that last but not least, we do have the UJ idea again. It is building a base. So one close above.

And then here we have our second close above. And now it’s going for its third close above 149 750, in hopes of being able to push up to 150 before the week closes out. If it gets bullish news tomorrow with the consumer sentiment numbers, then we can definitely see this one close, this gap here, and then as far as push up here to 150,and then seek to establish a close on top of 150 that it may be able to continue above there.

And so that’s what we have for these ideas. We look forward to trading these ideas with you guys in the Am.

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