Trade Idea (RSI, Woodies CCI, Divergence, GMMA) 2020-08-25

Trade Idea

Good morning everyone.

Yesterday, market sentiment was totally different between European and US markets.  US Dollar weakened to the European market, with the EURUSD rose temporarily to 1.185 and GBPUSD rose to around 1.3148. Meanwhile, in the U.S. market, U.S. stocks remained solid due to new treatments for COVID-19 and expectations for vaccine development. U.S. Treasury bonds, safe heaven assets, were sold, and US long-term interest rates rose to 0.654%, and US Dollar buying pressure became dominant, and EURUSD and GBPUSD set daily lows of 1.1785 and 1.3054 respectively. Gold was sold just same as bonds.

EURUSD, which I made long at 1.176 in the US time on Friday in last week, in the middle of the European market, it seemed to be bearish hidden divergence (see chart below) , so I partly took profit. After that it began to lower in the US market, So I took all the profits. Now I have no positions.

In this week, the Jackson Hole meeting will be held (Thursday-Friday), US Republican convention will be held, and also it is last week of this month. I have been in a delicate situation as to whether or not to continue buy-dip policy of EURUSD. I may totally change recognition of market direction. Today maybe I will have no trade..

For reference, I will also attach H1 chart of AUDUSD, GBPUSD, XAUUSD. All of them lack direction ahead of the Jackson Hole meeting.



XAUUSD (Gold) H1

Market Environment

Yesterday’s currency strength

US market last night

Dow 30: 28,308 (+378, +1.35%)
S&P 500: 3,431(+1.00%)
Nasdaq: 11,379 (+0.60%)
WTI future: 42.53↑
VIX Index: 22.37↓
US 10 year bond yield: 0.654↑
Gold future: 1,935↓

Asian market today

Nikkei future: around 23,266(+280)
US Dow 30 future: around 28,283(+43)

Economic indicators today

GMT 08:00(Germany)Ifo Business Climate Index
GMT 14:00(US)Consumer Confidence

8/27 (Thurs)-8/28 (Fri) Jackson Hole Meeting
(8/27 (Thurs.) GMT 13:10 FRB Mr. Powell Chairman’s lecture)

8/24 (Mon)-8/27 (Thu) American Republican National Convention
8/27 Speech by President Trump