Putting the market in perspective. Breakouts today, and Summer is over.
Without getting too micro in a trading level analysis, the fact remains that today we saw the dollar fall through some pretty key levels. It also is the 1st day of the post summer market, and that summer was predominantly a “non-trend” market with a relatively narrow range.
For me, non-trending leads to trending, AND the timing of the move today (of all days), does raise an eyebrow. The problem may be that the GBPUSD has not broken out yet, nor has the USDJPY. For both currency pairs the dollar has been lower. However, the dollar against the EURO, CHF, AUD and NZD all traded at new lows. Gold and Silver traded at new highs as well.
It is tempting to think in terms of the Pavlovian reaction that has controlled the market over the last few months. That is – sell highs and buy lows - but I am a bit more cautious on this move – until the charts tell a different story. Right now, it is too soon to say that the dollar selling is over.
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