Sunday, October 16, 2011

Indices for week 17/10/11


Monthly: price had broken out and up of a symmetrical triangle the previous month.

Weekly chart: price bounced off the weekly 200 EMA two weeks ago. Last week's candle was a huge bearish candle but it is still within the Bollinger bands.

Daily chart: Price has retreated from last month’s up move to almost reach the 61.8% fib retrace level. This is a hugely significant area as it is near the daily 200 EMA, daily pivot S3, the bottom Bollinger band, a previous strong support/resistance level of 76 as well as being a psychological level at 76. Price actually touched the daily 200 EMA and bounced off this slightly.

4Hr chart: price broke down through the 4hr 200EMA last week and still looks rather bearish.

Thoughts: All the indicators point to further bearish tendencies for this USD index BUT I will wait to see how price reacts after market open this week around the daily 200 EMA level (also near the 61.8% fib retrace level) before taking further shorts against the USD. Price could react at this level and bounce back up suggesting a Long USD approach.


Monthly: price has bounced off the bottom trend line of a symmetrical triangle that dates back to June 2010.

Weekly: last week’s move was a huge bullish move. This up move was signalled by the previous week’s pin bar reversal candle.

Daily: Price has retraced just past the 61.8% fib level from last month’s down move. It stopped at the psychological level and previous S/R level of 108 which is also near the daily pivot R2 and monthly pivot R1 level. The daily 200 EMA is still a bit above the current price and is also near the daily pivot R3 level.

4 hr chart: the last two candles were spinning top/Doji indecision candles.

Thoughts: I will wait to see how the USDX reacts at the daily 200 EMA as this will probably give some direction to the EURX as they tend to be inversely correlated. The USDX is closer to the daily 200 EMA so should react earlier than the EURX at its daily 200 EMA. Thus, whatever direction the USDX adopts it will more than likely be inverse to the EURX.

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