Dollar Volatility Is Offering a Trade Setup

[Trading With Larry Benedict]( Note: We hope you’re enjoying all of your Opportunistic Trader content. That’s why we have a favor to ask… Would you please add services@exct.opportunistictrader.com to your contacts list? That will “whitelist” us with your email provider and help ensure these emails reach your inbox. If you’d like to learn more about whitelisting, you can check out our detailed instructions [here](. Thank you for your help! Dollar Volatility Is Offering a Trade Setup By Larry Benedict, editor, Trading With Larry Benedict Economic reports create fertile ground for traders. Like Friday’s payrolls report for September. U.S. employers created 254,000 jobs during the month. That blew past economist expectations of 150,000 jobs. Naturally, the stock market reaction gets most of the attention during moments like these. But if you really want to take advantage, another market arena dwarfs everything else. The global currency market often sharply reacts to economic news as well. That’s because data like interest rates can play a big role in currency movements. In this case, strong jobs reports make it less likely we’ll see another big rate cut in November. And those changing expectations can have a big impact on the dollar. Given that the currency market trades $7.5 trillion every day, that means there’s plenty of trading opportunity. Over my 40-year career, I’ve traded nearly a trillion dollars’ worth of currencies. And I’m watching a key trade setup following the jobs report… Recommended Link [Your Financial Planner Would NEVER Tell You to Invest This Way]( [image]( For the past several years, Silicon Valley insider Jeff Brown has shown a wide range of folks how to retire wealthy. But he hasn’t done it the usual way... His method is different – unlike anything you’ve probably ever seen. Fair warning: Your financial planner would NEVER tell you to follow this “Retirement Blueprint.” [Click here to see how it works.]( -- The U.S. Dollar Is Testing a Key Level… Again The U.S. Dollar Index (DXY) can help you spot trading opportunities. DXY tracks the dollar’s performance against a basket of currencies like the euro and Japanese yen. And going back to the start of 2023, DXY has kept testing a key chart area multiple times. That means it may be building a potential trade setup. Take a look at the chart below. [chart] ([Click here to expand image]( The shaded area on the chart shows the 100 support zone. DXY has tested this zone at least six times going back to the start of last year. And more recently, you can see DXY rallied after its latest test (see the arrow). That rebound picked up steam following Friday’s payrolls report. Now, DXY’s reaction around this zone has delivered trading opportunities in the past. So when I see this key level coming into play, my attention turns to a certain currency pair… Free Trading Resources Have you checked out Larry's free trading resources on his website? It contains a full trading glossary to help kickstart your trading career – at zero cost to you. Just [click here]( to check it out. Watching EUR/USD No other currency has a greater bearing on DXY than the euro. It makes up 58% of that basket. That means the euro has a major impact on movements in DXY. DXY is bouncing off support once again. So it’s time to pay attention to what’s happening with the EUR/USD currency pair in the chart below: [chart] ([Click here to expand image]( When the line is rising, the euro is strengthening against the dollar. And when the line is falling, that means the dollar is strengthening against the euro. As DXY rallies off price support around the 100 level, the EUR/USD is moving lower. It tested resistance at 1.12 (the shaded area and arrow). But with the price retreating from that level, that could be a trading opportunity to watch. Take another look at the chart. [chart] ([Click here to expand image]( The pullback in EUR/USD has taken the currency pair down to a price support level (the dashed line at “1”). That same level produced a rally last month. Also, the Relative Strength Index (RSI) is dropping back toward the 40 level at “A.” An RSI reading of 40 often represents oversold conditions during an uptrend. You can see with the dashed line that the RSI has held over 40 since the EUR/USD uptrend that started in June this year. The recent EUR/USD momentum looks extended to the downside, coupled with price support coming into play. So it’s time to be on the lookout for a mean-reverting move higher. Regards, Larry Benedict Editor, Trading With Larry Benedict [The Opportunistic Trader]( The Opportunistic Trader 55 NE 5th Avenue, Delray Beach, FL 33483 [www.opportunistictrader.com]( To ensure our emails continue reaching your inbox, please [add our email address]( to your address book. This editorial email containing advertisements was sent to {EMAIL} because you subscribed to this service. To stop receiving these emails, click [here](. The Opportunistic Trader welcomes your feedback and questions. But please note: The law prohibits us from giving personalized advice. To contact Customer Service, call toll free Domestic/International: 1-888-208-6550, Mon–Fri, 9am–5pm ET, or email us [here](mailto:feedback@opportunistictrader.com). © 2024 Omnia Research, LLC. All rights reserved. Any reproduction, copying, or redistribution of our content, in whole or in part, is prohibited without written permission from Omnia Research, LLC. [Privacy Policy]( | [Terms of Use](