DXY - Weekly - Multi-Timeframe Analysis Series 1Continuing with another episode of Multi-Timeframe Analysis Series 1, I'd like to break down the DXY.
The DXY being weighted as follows:
EUR - 57.6%
JPY - 13.6 %
GBP - 11.9%
CAD - 9.1%
SEK - 4.2%
CHF - 3.6%
As you may imagine, there's a lot more interest in using the DXY for a correlation / confluence tool when trading the EURUSD. The EURO equates to over half of the overall weight of the index, meaning there's a majority interest in the EUR vs USD.
We can use this to our advantage, alongside the USDOLLAR INDEX, to add positive or negative trade factors when considering positions across USD pairs and commodities.
Comments
Looking at the Weekly timeframe gives us a different picture to that on the Monthly. We a low-test candle printing into the 20/50 EMA wave, this indicates a possible continuation to the near-term levels of 97.40 region. If we did see this push to the upside, it's change the formation on the current Monthly candle (and potentially the overall outlook shared within the Monthly breakdown). Thinking in terms of the longer time horizon, if we see a break of 97.80 I think it's possible to reach the realms of 100.
Key Note
The Weekly and Monthly are conflicting, which can often be a sign of the overall bias changing from beneath the surface. The smaller timeframes turn quicker, and when they align, this can change the direction gradually on the higher timeframes.
Multitimeframe
D1 bias, H1 setup, short term executionI'll post my Ninjatrader charts for trade entries. This is the kind of setup I want to wait for vs fighting the grind on NQ today.
I'm a momentum trader, and momentum comes from traps and/or tipping points. I don't want price to ever come back to my entry and I don't believe in wide stops.
Before taking entries, ask yourself about the market state. Is it grinding? If so, you're going to get killed with constant retests of your entries, general noise etc. What's the point getting into a position you think is going to be retested (I'm speaking as a daytrader, not a swing trader...).
If you're getting stuck overtrading, ask yourself this:
Do I really expect this trade to move to my target?
If there's a preceding trap AND contraction AND empty space ahead of you...that's where the money's made.