Indices for week 26/12/11

USDX

Monthly: Trend up. USDX has currently broken up and out of a symmetrical triangle. A bullish sign but still a few days until month end.

Weekly: Trend up. A red indecision type of candle though, with a long lower shadow. Not surprising leading into holiday period though.

Daily: Trend up/flat. Overall trend is up but there was a lot of sideways movement in the last week leading into holiday mode.

4hr: Trend flat. Price has hardly left the 80 area for the last week and a half. This is the daily pivot, monthly pivot R1 and strong previous support & resistance level too.

Thoughts: I will watch and wait to see how price moves from the 80 level that it has been stuck at. Both the + and – DMI are below 20 on the 4hr chart. I’ll be watching these indicators to gauge how momentum moves price action. The next critical area in the upper zone seems to be the 81 level. If price moves, closes and holds above 81 then I think there could be quite a rally and ascent from there. There does not seem to be too much blocking price from further upward movement once it’s past the 81 level.

I would need to see the USD move back down, close and hold below the daily trend line before I would consider a Short on the USD

As always, Fundamentals, by way of Euro zone dramas and news announcements, continue to be triggers for price movement on the indices. These events can always have the potential to undermine all Technical analysis.

EURX

Monthly: Trend down. Current monthly candle is very bearish but has a few days left before close. Price has fallen to rest just above the bottom trend line of the large symmetrical triangle dating back to May last year, 2010.

Weekly: Trend down. Last week’s candle was an indecision Doji though.

Daily: Trend down/flat. The last 7 days or so have seen price hang around and just above the 103 level.

4 hr: Trend flat. Price has paused to take stock of where it wants to go next. Price is stuck at the 103 level which is strong previous support/resistance, the daily pivot and just above the monthly pivot S2 and trend line.

Thoughts: I will watch and wait to see how price moves from the 103 level that it has been stuck at. Both the + and – DMI are below 20 on the 4hr chart. I’ll be watching these indicators to gauge how momentum will move price action. A move down below 103 and the trend line with a break, close and hold would have me looking to short the EUR in pairs. I will not look to Long the EUR though unless it breaks up, closes and holds above the 104 level OR until the ADX/+DMI trend up.

NB: Christmas Eve, 4pm here. It's hot and we're out the back of the house, near the pool and watching, as is our ritual each Christmas, 'Remember the Titans'. Have a safe and happy break guys.