Forex Brief for Oct. 3: The Euro Charging to our Profit Target
Rowan Crosby • 2 min read
It’s becoming pretty clear that momentum in the USD is now to the upside. The Greenback has been in a sharp downtrend since December of 2016 and it looked like nothing was going to slow down the momentum. However thanks to US Federal Reserve Chairman and the Federal Reserve, it looks like the time has come for things to change with the USD.
Talk of an interest rate hike has fired up traders and the bids are coming thick and fast. All the majors are feeling the pinch as the USD leads the charge.
For the purposes of trading, we need to start taking that into consideration. For almost a year we’ve been able to ride a nice uptrend in things like the EUR/USD, however, there is now a clear change in sentiment.
Top Economic Data
GBP – Construction PMI is due for release at 8:30 GMT with analysts predicting a slight decrease for September at 51.0.
EUR/USD – The Decline is Gaining Steam
The Euro has been in a huge bull trend, and we’ve been lucky enough to pick a host of great opportunities for you. Now the momentum is turning, it looks like the short side is the way to go and we will be targeting some key support levels to confirm the longer-term bias.
EUR/USD – 240 min Chart.
EUR/USD -Trading Plan
We have a short signal open on the EUR/USD, where we are targeting 1.1559 to the downside. There’s a big support level sitting at 1.1700 and if that can get taken out, I expect the Euro to move very quickly to the take profit region.
SPX – Stocks are Really Overbought
OK, this might be getting to be old news, but whatever way we look at it, stocks are becoming way overbought. The S&P 500 (SPX) has rallied to new records on almost a daily basis. In the short-term, it’s important to remember that stocks (generally speaking) are mean-reverting. So when we have a few up days in a row, the probability of a sell-off increases dramatically.
SPX – 240 min Chart.
SPX – Trading Plan
We are currently looking at a short-term sell signal in the SPX once the US markets open. We are overdue for a correction and I expect the mean-reverting tendencies of the stock market to start to kick in. Keep a close eye on FX Leaders signals at the open of U.S. markets for a great opportunity to short stocks.
There’s no doubt in my mind that we are reaching an inflection point. The next week is going to be massive and should provide plenty of opportunities for some great trades. Good luck today guys!!!