Weekly Price Action & Ichimoku Chart Outlook | Oct. 7th – 12th
After needing a natural pullback from its recent uptrend, the Euro found support in the Kijun-sen and now seems like it wants to attack the recent swing highs at 1.3172. I suspect this a strong possibility so bears can look for price action triggers here while bulls can look for pullbacks to the former resistance at 1.2967 or deeper pullbacks toward 1.2800 before adding longs. The former level was resistance on several touches so may offer a quicker entry to re-join the uptrend.
Being that price held above the Kijun-sen, the overall trend is still in place and momentum is moderate. The key from an ichimoku perspective will be the chikou line clearing the 1.3167 swing highs.
The Kumo Break discussed last week has found its way lower as expected, even coming back towards the flat bottom and rejecting off of it twice. The pair also formed a tenkan-sen kijun-sen cross downward (medium), so the downside move could start to gain traction if it can clear the main lows at 1.0151. Being that the pair is likely in a Y-wave, this would also support the more downside theory and likely selling pressure to remain all week.
I’m expecting a downside target of 1.0008 at a minimum to fulfill the Y-wave before buyers would consider coming back into the market. So bulls have a level lower they can enter while bears can sell any rejections around 1.0263 or near the flat Kumo top.
After the pullback towards the dynamic support and 20ema held on the daily chart, the Dow Jones rallied 200pts and had three bull days to end last week. However, the index formed a pin bar strategy off the key multi-year highs at 13660 suggesting there are sellers willing to defend the level.
Any corrective pullbacks into this level could be used as a price action trigger to sell the Dow, targeting the 20ema and recent support around 13400. Bears will need to wait for a pullback here, or a breakout pullback setup above the multi-year highs before adding new longs.
Continuing the uptrend with a pin bar rejection off the 20ema last week, the precious metal ended the week forming an outside bar near the critical $1800 resistance area where I suspect a fair amount of stops are parked just above. The shiny metal has yet to make significant gains over the last three weeks, only slowly inching higher. However, it continues to form higher lows and be bought up on the dips, so the major trend is still in place.
Bears can look for shorts at the $1800 figure taking profits at $1790 and $1780 while bulls can look for pullbacks towards the $1755 region before entering long as the overall trend remains intact for now.