DXY, USD/CAD, FTSE 100 and XLB Forecasts – Wide Range of Markets in Play

DXY Technical Analysis

The first chart in front of you is the US dollar index and quite often I realistically watch this chart almost every day because it gives me a heads up as to what might happen in the forex world.

Currently, the 98 level is very difficult for the US dollar to break above, but it certainly seems like it is going to attempt to get above there, and in fact, multiple times has sold off only to pressure it again.

If we can break out above the 98 level the next thing that I will be looking to do is buy the US dollar against some of the weaker currencies out there.

USD/CAD Technical Analysis

Right now, I have my eye on a couple of them, but this next chart is probably the first place I look. The US dollar against the Canadian dollar is a market that has formed a massive W pattern and is sitting right at the 50-day EMA.

If the US dollar index breaks above the 98 level, then I suspect that the US dollar will rally above the 1.3750 level, triggering further Canadian dollar weakness. At that point, I would be looking for a move to the 1.39 level via the 200-day EMA.

Alternatively, if we pull back, then I’ll be watching this for a potential buy on the dip situation, although full disclosure, it probably won’t be for several days.

FTSE 100 Technical Analysis

Outside of the currency markets, I’m watching indices in Europe do really well, and right now the FTSE 100 is something I want to be involved in. I’m looking for the slightest pullback on short-term dips to take advantage of and I’m looking to hold this for a while.

I don’t think this is just a day trade, I think this is something that could really start to take off. The measured move is possibly one to the 11,000-level, depending on where you define the last couple of major support levels.

Regardless, this is a market that’s in a very strong uptrend, so I will more likely than not zoom down to shorter-term charts, maybe as low as 15 minutes, look for some type of drop and bounce that I can take advantage of, as we are in such a strong and obvious uptrend.

XLB Technical Analysis

Finally, the XLB ETF I’m watching is the materials sector ETF in the United States. It looks like it’s going to jump pre-market. It’s made up of chemicals, metals, mining, containers, packaging, construction material, paper and forest products.

It has been on fire for a while as the commodity boom continues with some of the metals markets looking a little perky this morning. I think it does well for this ETF, especially considering this is based on giants like Freeport-McMoRan, Sherwin-Williams, Corteva, Martin Marietta, and Newmont Corporation.

I like the idea of buying this ETF and if it can break above $54, I think it’s got probably much further to go.