Indices for week 7/11/11

USDX

Monthly: Trend down. There is a new candle for this month. Last month’s candle retraced down to about 50% of the previous month’s bullish candle.

Weekly: Trend down. Last week’s candle was a bullish engulfing candle. Price bounced of the strong support level of 75 from last week’s close. The weekly ADX/DMI is near the water line level of 20 indicating little obvious trend.

Daily: Trend flat. Price retraced on Tuesday to just above the 50% level from the down move of last month. This was caused by growing Euro zone concerns which strengthened the USD.

4hr: Trend flat. Price has ranged between the strong S/R levels of 77.5 -76.5 for most of last week, after Monday and Tuesday’s big up moves. Price finished the week at the 77 strong psychological level, which also happens to be the monthly and daily pivot levels and just above the 4hr 200 EMA. The ADX/DMI are well below the 20 level which is further supporting evidence of a lack of a clear trend.

Thoughts: I think technical analysis will be overshadowed by fundamentals and news announcement during the coming week. There is still much doubt about the Greek debt bailout and there is rising talk and concern about the woes in Italy and Spain. All of this could lead to further ‘risk off’ trading which usually sees money flow into, and boost, the price of the USD. I will be watching to see the impact of further news and whether this can move price out of the narrow trading range of 77.5-76.5.

A break and close above 77.5 would have me looking to Long the USD in pairs. A break and close below the 76.5 would see me looking to short the USD in pairs.

EURX

Monthly: Trend down. There is a new candle for this month which so far is bearish and small. Last month’s bullish candle retraced up to 50% of the previous month’s down move. This is the inverse of the USDX. Price action is being held with a symmetrical wedge pattern.

Weekly: Trend down. Last week’s candle was a bearish, almost engulfing candle. A smaller symmetrical wedge pattern is still evident and continues to contain price action. A weekly bearish trend line is still in place as well.

Daily: Trend flat. Worrying Greek debt and EU news sent price tumbling down on Monday and Tuesday of last week. The ADX/DMI are both down near the 20 level revealing little trend in place for this index.

4 hr: Trend flat. Price traded sideways for much of the latter part of the week, ranging between 107.5 and 106.5. Price finished off at the psychological level of 107 and just above the monthly and daily pivot levels and under the 4hr 200 EMA.

Thoughts: My thoughts are much the same as for the USDX, except in reverse. Further Euro zone concern will probably see a ‘risk off’ approach to the markets. This usually means Long USD and Short EUR and AUD etc. I will be watching to see the impact of further news and whether this can move price out of the narrow trading range of 107.5-106.5.

A break and close above 107.5 would have me looking for further reasons to Long the EUR in pairs. A break and close below the 106.5 would see me looking to short the EUR in pairs.