Euro Futures have Put In a Very Small Breakout from Their Extended Falling Wedge (Orange)
Euro futures have put in a small breakout from their extended falling wedge. The euro is bottoming for a move to the blue megaphone top at roughly 1.11. You could start a position here or wait for the DX and ten-year to catch up.
DX is still working on a rising wedge within a price channel. The rising wedge doesn’t have to complete–it could morph into a megaphone top, for example, or a head and shoulders top for the channeled move.
But it could also retrace to the channel bottom and then continue up. So you want to actually see a top complete and break the price out through the channel bottom to get short.
DX has Confirmed a Price Channel (Purple) and May be Forming a Rising Wedge Top (Red) before a Downwards Breakout from the Channel
The ten-year t-note has put in a breakout from an inverse head and shoulders (blue neckline in chart below), but the breakout has occurred in the critical decision wave of a price channel (red in chart), meaning that if the ten-year wants to get tricky here, it has the perfect set-up to do it.
The Ten-Year has Broken Out of its Inverse H&S (Blue Neckline) but Needs to Break Out of its Red Price Channel as Well
What you want to see to go long the ten-year is a retrace to the blue neckline and a breakout through the top of the red price channel into a melt-up channel.
There’s a good chance that will be the signal that everything is ready to turn.
If you see the ten-year retrace all the way to the red channel bottom, the purple scenario is in play and that means they’re still toying with us. The purple scenario is a megaphone right shoulder on the ZN inverse H&S. The ten-year would still be a strong favorite to break out upwards from the inverse H&S after the next dip.