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Crude Oil & the Dollar Print
Written by Site admin   
Sunday, 29 January 2017 19:44

Crude Oil and the US Dollar have a long term correlation, it's inverse, so as the Dollar goes up, Oil goes down.

Since Trumps election we've had a break out and bull run in the Dollar and, if as seems likely, there will be a series of US interest rate rises this year, there's more strength to come. So, if the correlation is inverse and the Dollar rises, Crude Oil should fall, right?

WTIDXYJan17

On this chart I inverted the DXY, in red, so withe the correlation they should both be running in the same direction. Problem is, the correlation broke last May. Since then they've moved opposite the long term correlation and have, this month, started to converge again. As the arrows there should be much more of this to come. Either Crude falls or the Dollar strengthens.

 

From the blog

Great Reversals - The Doji Sandwich

There are plenty of price patterns to trade from the classic Flags
and Head & Shoulders to the Harmonics that will feature in a future
webinar. Some of the simplest can be the best and some years ago an
old friend, Bill Eykin, coined the Doji Sandwich.

 
 
It's amongst the most powerful of the three candle patterns, simply
a norrow range candle is sandwiched between two much longer ones
with the smaller 'Doji or Spinner' candle stuck in between, not
sure of where it to go next. As can be seen on this daily chart,
when it forms it can lead to some excellent moves.
 

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