Sure, the US Dollar is Currently Strong, But...

Our YouTube video illustrates the US Dollar's current ongoing strength and challenges the assertion that the US Dollar has never been stronger.

While popular indices such as the US Dollar Index may suggest otherwise, the US Dollar's current bull run is not without precedent, nor is it the greatest period of US$ strength.

The chart below shows the multi-month period of US Dollar strength in 2001 following the terrorist attacks in the US. The US Dollar notched monthly gains for five consecutive months.

The following chart shows the multi-month period of US Dollar strength in 2008 during the global financial crisis. The markets purchased the US Dollar as a flight-to-quality. The US Dollar scored monthly gains for eight consecutive months.

The chart below shows the current period of ongoing US Dollar strength. The US Dollar has registered four consecutive monthly gains.

Perhaps the ongoing US Dollar run-up will be be extended and result in a period of unprecedented US Dollar strength, but the markets are not quite there yet.


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FOREX Trade of the Day: Sell CHF/JPY

Our YouTube video illustrates today's FOREX Trade of the Day and identifies further downside targets.

Today's FOREX Trade of the Day was a short CHF/JPY position.

Sell:  113.46
Buy: 113.08

Notional Intraday Profit: +38 pips

Today's intraday High of 113.47 was right around the 23.6% retracement level of the 2013 High through the 2014 Low, rendering the retracement level a profitable Entry Sell level.

Today's intraday Low of 113.08 was right around the 76.4% retracement level of the August Low through the September High, rendering the retracement level a profitable Exit Buy level.

Further downside targets include 112.56, 111.87, and 109.53.


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SILVER Elected Major Stops Below 17.09 as Weakness Extended

Our YouTube video shows how Silver elected major stops below 17.09 on Tuesday en route to 16.85 and its aftermath.

Traders finally ganged up on the previous multi-year low of US$ 17.35 level this week and violently took it out, electing major stops below the 17.09 area - a downside price objective that was previously a retracement extension level originating from the 16 September 2014 high of 18.86. Silver was driven as low as the 16.85 area on Tuesday and yesterday's Daily Low was just above that area.

Let's first see why this level was important on our Daily Chart below.

Let's next see how and why stops were piled up below this level and how sharp the move lower was to 16.85 on this 15-minute chart below. We see the market first tried to move below 17.09, was thwarted, and then found enough selling pressure to elect the stops below en route to 16.85.

The previous multi-year Low of 17.35 has been toppish today.

Downside price objectives are 16.28, 15.66, and 12.75.

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FOREX Trade of the Day: Sell EUR/JPY

Our YouTube video illustrates today's FOREX Trade of the Day and identifies further downside targets.

Today's FOREX Trade of the Day was a short EUR/JPY position.

Sell: 137.72
Buy: 137.08

Notional Intraday Profit: +64 pips

Today's intraday High of 137.72 was right around the 23.6% retracement level of yesterday's Daily range, rendering the retracement level a profitable Entry Sell level.

Today's intraday Low of 136.94 was below the 76.4% retracement level of the September Monthly range, rendering the retracement level a profitable Exit Buy level.

Further downside targets include 135.71, 133.50, and 132.03.


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FOREX: EUR/USD Reaches Our 1.2625 Level and Hits Major Stops before ECB Meeting Tomorrow

Our YouTube video shows the move lower in EUR/USD to our downside price objective of 1.2625, below which major stops were hit.  Our video from 22 September identified this key level.

European Central Bank is expected to release details tomorrow about its asset purchase program tomorrow after the Governing Council Meeting. ECB President Draghi is expected to detail a

€700 billion scheme to purchase asset-backed securities and covered bonds as part of the ECB's latest foray into quantitative easing (QE).  The ECB is also trying to engender inflation and encourage banks to lend more capital following the ECB's disappointing Targeted Long Term Refinancing Operation (TLTRO) two weeks ago.

The Daily chart below shows the 1.2625 target level that we identified on 22 September and shows many stops hit below this level yesterday.

The Weekly chart below shows our next downside target of 1.2493.

Additional downside targets include 1.2286 and 1.2132.

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FOREX: USD/JPY Takes Out 110 and Rallies to 6-Year High

Our YouTube video shows how USD/JPY absorbed 110.00 and moved to its highest level since August 2008.

It is interesting how USD/JPY waited until after the end of September to reach 110.00, perhaps suggesting there were large option expiries at month's end that counterparties may have been protecting with orders to sell USD/JPY below the big figure.

Regardless, the US dollar moved sharply higher from a 102 handle in early August and knocked out 110.00 today, a rapid move that some would herald as a validation of Abenomics and Japan's efforts to create inflation to weaken the yen. This Weekly chart shows the swift run-up over recent weeks and we can view 110.20 as a retracement extension exhaustion level.

The Monthly chart below also depicts the recent move.

Additional upside targets are 110.20, 111.60, and 112.29.

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FOREX Trade of the Day: Buy NZD/JPY

Our YouTube video illustrates today's FOREX Trade of the Day and identifies further upside targets.

Today's FOREX Trade of the Day was a long NZD/JPY position.

Buy: 85.36
Sell: 85.77

Notional Intraday Profit: +39 pips

Today's intraday Low of 85.33 was just below the 23.6% retracement of the 29 September Low of 84.33 and the 30 September High of 85.62, rendering the retracement level a profitable Entry Buy level.

Today's intraday High of 85.81 was just above was the 38.2% retracement level of the 25 September High of 88.14 and the 29 September Low of 84.33, rendering the retracement level a profitable Exit Sell level.

Further upside targets include 86.24, 86.66, and 87.24.

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