Timing Markets is a difficult task, absolutely key to generating as much profit as possible from important fundamental setups.
It is indeed important to be timely with your trade to ensure that entries remain favorable and the risk-reward remains positive – but an essential part of timing is not being too early.
The US Dollar has been on a significant uptrend since the end of the January FOMC (as forecasted here) and is now testing the extremes of its gigantic 95.50-100.50 range.
This is where timing entries is a daunting task – one could just begin shorting the US Dollar as soon as it reaches its highs, but when double tops occur, they often come to get your stops.
That is when confirmation steps in to provide even more favorable entries and timing – It can be Fundamental, with a change in narrative (something that is kind of emerging as of late), or a confirmation in Technicals.
Sometimes it can actually be both, and this is what could now be offered in the US Dollar.
Nothing is sure in Markets, particularly during volatile periods when breaking news can change the entire picture in a matter of a few seconds – but at least, some setups can look better than others.
As we speak, the US Dollar is rejecting its War highs for the third consecutive test, forming a Double Top – Both the US and Israel are slowly looking to turn the page on the full month of operations, particularly with the Trump Administration considering ending the conflict without taking control of the Strait of Hormuz to punish against European and Asia allies that did not manifest their appetite for such operations (and even went against it, like Spain).
The reversal, if it does arrive, may not unfold in one session but progressive waves as the narrative slowly switches.
Crude Oil prices still dictate general Market flows, so its drop will have to be the extra confirmation signal.
We’ll explore a few scenarios for a potential large reversal in an in-depth technical analysis of DXY.