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MENAFN- Daily Forex) Potential signal:
I'm a buyer of this market, if we get a daily close above the 45,100 level. I would have a stop loss near the 44,500 region, and at this point in time it be looking for a move to at least the 46,000 level, possibly even much higher than that.
During my daily analysis of major indices, the Dow Jones 30 captured my attention as it was threatening a major breakout of massive resistance in the form of the 45,000 level. It's worth noting that the 45,000 level is not only a large, round, psychologically significant figure, but it's also a massive swing high, and even an all-time high. Because of this, you always need to look at these areas very closely, as the market participants out there feel a little stretched. However, it's probably worth noting that most stock markets in the United States are probably going to continue to go higher, so I do like the idea of buying a dip.
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The technical analysis for this pair is a little overdone, but it is most certainly bullish. I would have no interest whatsoever in trying to get short of this market, but quite frankly any dip at this point in time I think I am waiting and patiently looking for a bit of a bounce on a short-term chart that I can take advantage of. On the other hand, if we were to break out to the upside in clear above the 45,100 level on a daily close, that's a very strong sign that the Dow Jones industrial average is going to continue to go higher.
The 50 Day EMA is near the 43,500 level and rising and should continue to be important. In fact, I expect that to be a bit of a“floor in the market”, and it's not until we break down below there that I would begin to shift my expectations from overly bullish, to a more neutral type of the trading attitude.
On the upside, if we were to break out above the 45,100 level, then it opens up a“measured move” all the way to the 48,000 region. That sounds rather drastic, but quite frankly if you just follow the longer-term charts, it becomes obvious that this is a market that continues to show strength over the longer term. At this point though, one thing that could cause a little bit of a bump along the road would be the tariffs between the United States and Canada/Mexico.
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