Thread by @MisterSpread

1/6 Busy day today in the markets,

Since I'm the type of trader who guides himself by the Price Action mainly, I prefer the phrase "show me the charts and I'll tell you the news" by Bernand Baruch.

Some thoughts below about #EURUSD #DXY .

CC: @JLinWins @deerpointmacro

https://twitter.com/JLinWins/status/1563206357863436288

2/6 Pre-Powell speech we had some headlines from #ECB officials signaling a potential 75bps rate hike due to #inflation and problems in the #EURO zone.
This caused $EURUSD to tap the supply area and perform a beautiful liquidity grab before resuming the current trend.

3/6 After losing the 1.00 / parity area, $EURUSD buyers must defend the $0.995 level. If we see that level taken out on a daily closing basis the target for this "bearish flag" pattern is $0.96 area, a -3.46% give or take.

4/6 Without no surprise the #DXY carved out a "BullFlag" pattern in the last 4 days with resistance around 108.8 area. IF $EURO drops below $0.95 area and goes towards $0.96 that means:
3.46 (potential drop) x 57.6% (EURO % of DXY) = +1.99296% on DXY just from EURO juice.

5/6 Taking in consideration that #BOJ (Bank of Japan) just commented that they will continue with their current stance and keep printing, DXY might go also higher helped by the $JPY who also has a hefty % from the Dollar Index.

6/7 Now, if all these happen or even if I'm watching them as they are developing, how can one be bullish #Equities short term? #SP500 looks abysmal today printing a big bearish engulfing candle after taking out 4140. If buyers don't close at least above 4120, oh boy👀.

7/7 None of the above is guaranteed that will happen, are my views on what might happen based on current Price Action and what levels can be opened if those patterns are confirmed.
I don't know what FED,ECB or BOJ will do but if $EURO reaches $0.96 it reconfirms that PA is King!