Indices for week 09/01/2012

I'm still away on holidays for this week and may not get to trade.  We are staying at a beach down on the NSW south coast...our bit of paradise.  The Cold Play 'Paradise' has been going around a lot of late.  Maybe listen to this as you read through the notes! http://www.youtube.com/watch?v=TM-ejaxt_Xw

USDX

Monthly: Trend up. 

Weekly:  Trend up. A large bullish candle for the week;  Wed, Thur and Fri all bullish candle days.

Daily:  Trend up.  Price broke through and closed above the strong psychological resistance level of 81.  It touched up at the monthly R1 level before retreating slightly.  Price has now broken out of the ascending wedge pattern which is a bullish sign. The ADX looks to be about to give a Long signal on the daily USDX.

4hr:  Trend flat. Price rallied and closed above the 81 level late on Friday.  It closed at around the daily R1 pivot level. 

Thoughts:  I will watch to see how price trades at the 81 level.  There does not seem to be too much blocking price from further upward movement past the 81 level.  If trading, I would be looking to go ‘long’on the USD in pairs from early next week.  I would not be surprised though to see the USDX pull back a bit to re-test the 81 level after its breakout. 

I would need to see the USD move back down, close and hold below the daily bear 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.  Price has fallen and closed below the bottom trend line of the large symmetrical triangle dating back to May last year, 2010. The current monthly candle is also bearish.

Weekly:  Trend down.  5 bearish candles in a row.  Price broke and closed out of the descending wedge pattern during the previous week.  Price re-tested this break out level during last week and has continued to fall since then.  Price has fallen about 180 pips since re-testing the trend line breakout level.

Daily: Trend down.  Wed, Thurs and Fri were quite bearish action days.  Price closed at just above the monthly S1 level after falling 180 pips for the week.

4 hr: Trend down.

Thoughts:  The Euro is at an extreme low point now.  Many contrarian traders would be expecting its fate to only improve and, thus, want to ‘Long’ the euro soon.  I am a technical trader though and will only trade ‘what I see’ and not ‘what I think’.  At the moment, I only see bearish signs in all of my indicators and chart patterns. 

I will watch to see if the bearish move on the EURX continues.   I will only be looking to ‘Short’ the Eur in pairs at the moment.   I will not look to Long the EUR though unless it breaks up, closes and holds above the previous trend line.  I do expect price to pause at the strong psychological resistance level of 100 if it gets down that far this week.