The last two days of last week were a game changer in the forex market, at least in the short term. The US Dollar has been losing ground for about two weeks in most forex majors, but on Thursday the situation changed. The USD started to make a comeback and since then there´s been a one way traffic, with the Buck making steady gains in consecutive waves, the same as in the Elliott wave pattern. 

It seems strange because in the first part of the week when the FED hawks were flooding the media with hawkish comments the Buck was feeling soggy and when the FED doves took their turn the USD found its feet gain. Someone would say that it has to do with the ECB; the forex market was waiting until the ECB meeting was over to position itself.

But that still doesn´t make that much sense for the other major forex pairs, apart from the Euro pairs. Besides that, the Buck gave us a signal on Wednesday when it put up a decent fight and on Thursday the high/low for the day didn´t exceed Wednesday´s high/low. That´s a signal that things are about to reverse, if you´re complaining that you can´t feel the market or read the market signs.

So yes, the USD has been in charge since Thursday. Late in Friday we thought that the USD was overbought in the short term forex charts and a retrace was due soon, so we opened a buy forex signal in EUR/USD around the 1.1230 level. It hit take profit this morning but we did go through some pain last Friday with this forex signal when the downside was extending below 1.12, but there´s no gain without pain in forex. 

The retrace happened overnight and we think that it might be over now, that´s the reason we opened a sell forex signal in EUR/USD. The 50 moving average on the hourly forex chart seems to provide enough resistance to stop this forex pair from moving higher. The stochastic indicator and RSI are also overbought in the sane timeframe forex chart so that´s another signal which is pointing down, besides the fundamental fear factor which comes from the assumed interest rate hike by the FED in about a week.