DIBS Chart Book for Week Ended July 15th 2011

The latest chart book with DIBS set ups highlighted is available. This past week featured a volatile breakout at the beginning of the week on the “risk off” theme, which was very good to early week DIBS breakouts. As the week progressed and the risk-off sell offs retraced, the action became choppier and less favourable to DIBS signals.





EURUSD Sell Off Jacks Up Correlations – Typical “Risk-Off” Stuff

The sell off in the EURO across multiple currency pairs has shown the typical risk-off type of price behaviour as correlations have been jacked up across the various EURO pairs.

Having checked out the correlation matrix at the mataf site (www.mataf.net) for a few periods you can really see how the short term action in the EURUSD has changed a bit. I used the correlation matrix for the daily time frame set to a 30-period for recent price action and to a 90-period for a longer time window (roughly one calendar quarter) and here are some results 

Daily Correlations – EURUSD way up there with EURCHF and EURJPY Lately

  • EURUSD – EURCHF – short term correlation has been jacked up…..like…a lot!: The 30 day correlation stands at 82.7 versus 90-days at -2.2, that is a huge difference. The screenshots below also show that over much longer periods (30 and 90 weeks) the correlation is quite low.
  • EURUSD – EURJPY – short term correlation has jumped up: The 30 day correlation stands at 91 versus 67.2 for 90-days.
  • EURUSD – EURAUD – another short term correlation that has jumped up a lot:  The 90-day correlation for EURUSD/EURAUD is -14.4, so in that context the increase to a +67.8 for past 30 days looks pretty sharp. Looking at the table below you cal also see that EURUSD-EURAUD has shown a similar correlation level as EURUSD-EURCAD, another “commodity linked” pair.

The chart below shows the figures for the 30-period for Daily and Weekly


The chart below shows the figures for the 90-period for Daily and Weekly


What does this mean for trading the EURO Pairs in the near term?

  • EURO-related news dominating headlines = look for high probability opportunities where several Euro crosses appear to be in agreement. For example, a study of the 1H Chart on the EURJPY and EURCHF for the period from July 11th until London open on July 12th showed highly similar price pattern of decline and consolidation prior to the 8-AM London open. This type of configuration can provide that extra bit of help when looking at opening range breakouts.


DIBS Chart Book – Week Ended July 8th

The latest DIBS Chart book is available for the week ended July 8th. The week was quite volatile as there was a lot of “risk off” type news developments. On many occasions the DIBS signals ended up being reversal patterns instead of trend continuation breakout patterns.

This week’s chart book covers EURUSD, GBPUSD and the “risk-on / risk-off” pairs: EURCHF and EURJPY.

Good trading,


DIBS Forex Chart Book For the Week Ended June 24th 2011

The latest chart book showing some recent DIBS charts for a few Forex pairs is available. This week the book features EURUSD, GBPUSD, USDCHF and has also included EURJPY, EURCHF and GBPCHF.


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