RJO FuturesCast

Daily Futures Market News, Commentary, & Insight

The U.S. dollar has recovered (and then some) over this last week managing to create the first fresh highs of 2020.

The equity markets were also quick to regain any lost ground, even as concerns over the (now global) Coronavirus exceeds its cousin, SARS’ death toll and the potential impact on Chinese productivity. The U.S. economy added a better than expected 225,000 jobs on Friday, further boosting the upbeat mood. Although the Global Indices finished quite strong, some technical divergence has begun to show in the momentum indicators, implying that exhaustion may be entering the markets at this time

U.S. Dollar Index, Bullish, Daily

Although 98.00-98.50 has presented a challenge throughout most of 2019, last week saw price action break out with determination, presenting a strong, clear trend, indicative of a definite underlying flow.

Price could be expected to engage in a retracement this coming week with 98.45 and 98.20 levels both offering a viable future level of support around which price can form a swing-low before resuming an uptrend.

Interestingly, the 98.20 level overlaps with two separate Fibonacci measurements based off of price retracing from a future key level. The Fibonacci measurements produce a 38.2% and a 50% level respectively that clusters closely with 98.20.

The 98.00 level has also been taken into consideration as a possible but least likely level to be tested for support.

An entry could present itself from these levels in the form of a bullish candlestick followed by the subsequent candlestick breaking the high and beginning a new move upwards.

An entry above the high of this bullish candlestick would trigger the trade when price follows through, and the low of the same candlestick could offer a sensible stop-loss placement location.

In terms of trade and/or risk management, risk can be mitigated by taking partial-profits should price achieve a 1:1 reward-to-risk price level.

NASDAQ Index, Bullish, Daily

The NASDAQ Index is the most bullish of all US Indices and has outperformed its cousins consistently over the last 18-24 months.

It has a clean and stable Monthly, Weekly, and Daily uptrend and has just completed a brief weekly retracement letting off a small amount of buying pressure. The fast recovery could imply a readiness to continue upwards and onward.

Friday completed a bearish candle which if the low is broken this week, could offer a small retracement to retest resistance at 9,250 for support. Should it retrace from here, a 38.2% Fibonacci retracement level overlaps closely with 9,250.

Should price retrace to this area, a small bullish or indecisive candlestick may present a signal that price is preparing to resume the next extension upwards.

Similar to the previous comments an entry above the high with a stop-loss below the low of this candlestick could provide an economic entry, should the following session break upwards.

Risk management will be the key so a stop-loss is imperative in order to protect capital exposure against unforeseen outcomes.

RJOF Editorial Team