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Keeping Eye On EURUSD For Shorts After Break Higher On USD Index

The USD reversed strongly to the upside last week, with price on USD Index breaking out of a downward channel which should be an important sign for a change in trend, even if just temporary. For the next few days, maybe even weeks we will be tracking a minimum three wave rally up on USD index which means that EUR, GBP, AUD and other currencies will probably depreciate.

USD index daily

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So with bullish view on USD Index we are bearish on the EURUSD and interested in short opportunities. We however need a corrective retracement on the intraday basis before we may consider any shorts. On the latest structure we suspect that prices accomplished decline in red wave iii) so current bounce is ideally part of a red wave iv) that may retrace even back to 1.3570. We could be looking for shorts from there but only if current rise will unfold in three legs.

EURUSD 1h

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