A look at the daily EUR/USD chart shows a possible top starting to form. Notice on the daily chart above that the RSI is at a level that has previously market major tops (see blue arrows on chart) which is combined with an RSI divergence forming if today's decline holds. Now this behavior can remain for a while as prices work higher, but it's a sign of the end of a trend, not the beginning.
I'm watching the euro closely because as I've said before, when the EUR/USD tops so will the stock market.
3 comments:
Nice catch on the deverging RSI!!
I enjoy your website! Thanks for sharing your hard work. Are you in line with Prechter's thinking on the dollar? Or are you thinking of a dollar reversal over a shorter time period before resuming the downward trend?
SRS
Thanks for the comments. SRS, yes I am in line with Prechter in thinking the dollar is forming a major bottom and will go on an insane rally that will coincide with a stock market collapse. So I'm looking for the EUR/USD to top to signal that the US dollar has bottomed and the stock market has topped.
Todd
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