Dow Jones
No matter how one looks at the Dow Jones index, it is impossible to ignore the rising wedge against the 30,000 level. Yes, it may act as a triangle as a reversal pattern, but bears would still like to see the market breaking and closing above the upper trendline. Unless that happens, bears will keep trying to short the index.
This week the Dow Jones and the U.S. stock market led the price action in the fiat currencies. While the Dow remained more or less close to the 30,000, other markets, like the EURUSD, GBPUSD, or AUDUSD, advanced sharply.
The combination of Dow declining towards the close of the trading day and then rising with the futures made it possible for the USD fall to continue. As such, today’s NFP is key both to the Dow Jones rising wedge and to the Dollar index.
To trade this wedge, bears may want to wait for either of the two edges to be reached first – ideally, the lower edge, as it signals the end of the pattern. On a break lower, bears must look for a break of the series of higher lows as well, as it would cement the bearish scenario. An invalidation comes at the upper edge while a proper take profit at twice the distance from the entry, projected from the lower edge of the pattern.
